- USD/CAD falls towards fresh seven-week lows around 1.3340 after the US CPI data.
- US CPI was lower than expected while initial jobless claims continued to show a strong labor market.
- The dollar continued to weaken overall, falling to 6 1/2 month lows.
The USD/CAD has recouped some of its losses after the release of the colder-than-expected US inflation report, which dragged the pair back towards its current weekly low of 1.3347, although it has recovered some ground subsequently. At time of writing, USD/CAD is trading at 1.3369, down 0.43% from its opening price.
The USD/CAD extends its bearish trend to four consecutive days
US stocks wobbled after the release of US inflation data. The US Bureau of Labor Statistics revealed that the December Consumer Price Index (CPI) fell -0.1% month-on-monthbelow estimates of 0%, while the annual basis fell to 6.5% from 7.1% in November. The so-called core CPI, which excludes volatile items such as food and energy, aligned with estimates of 0.3%m/m, while yoy data fell to 5.7%y/y, below the 6% forecast.
After knowing the data, the US dollar (USD) suffered a general fall due to the increasing Speculation that the Federal Reserve will further slow the pace of interest rate hikes. That being said, USD/CAD fell towards its daily/weekly low at 1.3350.
At the same time, the Bureau of Labor Statistics revealed that initial claims for jobless benefits last week stood at 205,000, below the 215,000 claims analysts had expected, showing the resiliency of the labor market.
On the other hand, the president of the Philadelphia Fed, Patrick Harker, stated that it would be appropriate to apply increases of 25 basis points from now on after the publication of the US CPI report. Harker commented that the time for large-scale rate hikes is past and that he expects a few more rate hikes this year.
USD/CAD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
