Canadian Dollar Surges on Unexpected Inflation Rebound in May
Action Insight Mid-Day Report 6-25-24 |
Canadian Dollar Surges on Unexpected Inflation Rebound in May |
Canadian Dollar jumps following after data showing that Canadian inflation unexpectedly accelerated in May. More importantly, the resurgence in price pressures was largely driven by significant increase in services inflation. The data aligns with BoC Governor Tiff Macklem's cautious stance that the central bank should not ease monetary policy "too quickly." Given this context, the likelihood of a back-to-back rate cut in July seems minimal. Attention will now shift to whether the Bank of Canada has room to cut interest rates at its September meeting, assuming no drastic economic surprises in the interim. In broader currency markets, the Euro has turned broadly lower as its near term recovery momentum waned. The common currency remains overshadowed by uncertainties related to the French parliamentary elections, making a sustained bounce unlikely until the political situation clarifies. Australian and New Zealand Dollars, along with Swiss Franc, are among the weakest performers today too. In contrast, Dollar is showing strength, positioning as the second strongest currency after Canadian Dollar. Yen is also seeing some recovery, while British Pound is holding a middle ground... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0696; (P) 1.0721; (R1) 1.0760; More.... EUR/USD dips notably in early US session but stays in range above 1.0667. Intraday bias remains neutral at this point. Further fall is expected with 1.0760 resistance intact. Decline from 1.0915 is seen as another leg in the larger corrective pattern. Break of 1.0667 will target 1.0601 and below. However, firm break of 1.0760 will turn intraday bias back to the upside for stronger rebound. | |
GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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23:50 | JPY | Corporate Service Price Index Y/Y May | 2.50% | 2.80% | 2.70% | 00:30 | AUD | Westpac Consumer Confidence Jun | 1.70% | -0.30% | 12:30 | CAD | CPI M/M May | 0.60% | 0.30% | 0.50% | 12:30 | CAD | CPI Y/Y May | 2.90% | 2.60% | 2.70% | 12:30 | CAD | CPI Core M/M May | 0.60% | 0.20% | 0.20% | 12:30 | CAD | CPI Median Y/Y May | 2.80% | 2.60% | 2.60% | 12:30 | CAD | CPI Trimmed Y/Y May | 2.90% | 2.80% | 2.90% | 12:30 | CAD | CPI Common Y/Y May | 2.40% | 2.60% | 2.60% | 13:00 | USD | S&P/CS Composite-20 HPI Y/Y Apr | 7.00% | 7.40% | 13:00 | USD | Housing Price Index M/M Apr | 0.50% | 0.10% | 14:00 | USD | Consumer Confidence Jun | 100.2 | 102 |
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