- The Canadian dollar rebounds after mixed inflation figures in Canada.
- Weak US manufacturing data has increased negative pressure on the Dollar.
- USD/CAD maintains its bullish trend, with 1.3420 and 1.3350 as supports.
Consumer prices fell in Canada in December, according to data from Canada Statistics, although the overall rate accelerated from November. In the US, the New York Fed's manufacturing indicator revealed a sharp deterioration in the sector, which added negative pressure to the Dollar.
The Canadian CPI fell 0.3% in December, as expected, while the annual rate grew at a pace of 3.4%, compared to 3.1% the previous month. The BoC's core CPI, however, shows a different picture, with the monthly rate down 0.5% and annual inflation falling to 2.6% from 2.8% previously.
US manufacturing activity data disappoints
At the same time, the New York Fed's Empire State Index has fallen to -43.7 in January from -14.5 in December, versus expectations for a reading of -5. These figures paint a negative picture of factory activity and erode speculative demand for the USD.
USD/CAD has seen a sharp reaction at the intraday highs of 1.3500, retreating to the 1.3450 area at the time of writing.
The pair, however, maintains the broader positive trend, with support levels at 1.3420 and 1.3350 likely to provide significant support ahead of Fed member Waller's speech.
To the upside, immediate resistance is at 1.3500, with the next target at 1.3545.
USD/CAD technical levels to watch
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.
