USD/CAD sinks after US CPI data

The Canadian Dollar is breaking out on the back of the softer than expected CPI data in the United States. Technically speaking, the bears have eyes on 1.3380 as a possible last defense for a much deeper correction versus the US dollar.

The Canadian Dollar, which had already been heading up before the US session, rallied hard on the back of the US Consumer Price Index that missed market expectations to the downside. At the time of writing, USD/CAD is trading at 1.3555, down 0.56% on the day after falling from a high of 1.3644 to a low of 1.3520 so far.

The Consumer Price Index led to the markets pricing the terminal Fed rate down to 4.86% vs 4.98% prior to the report. Consequently, US stocks on Wall Street rallied with the NASDAQ jumping over 400 points and rallying over 3.3%. The Canadian Dollar is risk-sensitive, belonging to the commodity complex, and the prospects of a hiking interest rates at a slower pace by the Fed are feeding demand levels with the CRB index up some 1% on the data.


US CPI MoM Nov: 0.1% (expected: 0.3%, previous reading: 0.4%).
US CPI Ex Food And Energy MoM Nov: 0.2% (expected: 0.3%, previous reading: 0.3%).
US CPI YoY Nov: 7.1% (expected: 7.3%, previous reading: 7.7%).
US CPI Ex Food And Energy YoY Nov: 6.0% (expected: 6.1%, previous reading 6.3%).