USD/CAD shyly rises after CPI data

The USD/CAD pair broke two days of losses and rose towards 1.3350s on US inflation data. The US Consumer Price Index for January was mixed, with MoM aligned with estimates, while YoY figures were above forecasts.

The USD/CAD pair braces to its early gains in the day, though it retreated after hitting a daily high of 1.3390 on news that inflation edged down, though it was above expectations. That increased demand for the US dollar during the New York session. Later on the day, the USD/CAD pair slid from 1.3352 and is trading at 1.3340 after hitting a low of 1.3273

The US Bureau of Labor Statistics reported that the CPI for January increased by 6.4% compared to the same period last year, which was higher than the predicted rate of 6.2%. Similarly, the core CPI rose by 5.6% year-on-year, above the estimated figure of 5.5%. Month-over-month data readings were consistent with the predicted values.

Following the release of the US inflation report, a slew of Federal Reserve (Fed) policymakers had crossed newswires. Officials expressed that the US central bank is not done hiking rates while emphasizing that inflation is high and that further tightening is needed. They stressed that higher-for-longer is their playbook and are not expecting to cut rates in 2023.