Week in FX Americas – Loonie Takes Flight In Wrong Direction
Another benign inflation reading from Canada has the CAD ending the week extending its losses above parity outright. The country's core-inflation rose by an annualized pace or +1.1% on Friday, well below Governor Carney and the Bank of Canada's medium term inflation target of +2%. So far the week the loonies plight has fallen -1.47% against its largest trading partner, south of the 49th parallel.
Yesterday's inflation report was closely watched especially after the Banks MPR report mid week suggested that “muted” inflation is a factor that would suggest that rate increases are “less imminent.” The domestic economy is obviously slowing, but at what pace? Governor Carney's less hawkish stance coupled with a commodity sector with its own troubles has the ability to push USD/CAD towards techies short term target of 1.0250.
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