Canadian Dollar falls back as US CPI inflation kicks higher.

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• Canadian Dollar falls back as US CPI inflation kicks higher.
• Canada economic data remains absent until next week.
• Rising inflation makes rate cuts difficult.

The Canadian Dollar (CAD) is mostly lower on Thursday as broader markets pivot into safe haven currencies after US inflation from the Consumer Price Index (CPI) ticked broadly higher than markets were expecting, widening the gap between market hopes of a March rate cut and the Federal Reserve’s (Fed) current stance.

Economic data from Canada remains absent from the data docket for the rest of the week, leaving CAD traders waiting for next week’s Canada CPI print as well as Canadian Retail Sales figures from November, due next Tuesday and Friday, respectively.

The Canadian Dollar (CAD) is broadly lower on Thursday, gaining a quarter of a percent against the Australian Dollar (AUD) and a scant tenth of a percent against the Swiss Franc (CHF). The Loonie has shed a fifth of a percent against both the Japanese Yen (JPY) and the Euro (EUR), and the CAD has also slumped around half a percent against the US Dollar heading into the tail end of the trading week.

The Canadian Dollar tumbled against the US Dollar post-CPI, sending the USD/CAD pair toward 1.3450 after hitting a near-term low of 1.3350 in the run-up to US inflation prints.

Intraday, USD/CAD bids continue to be buoyed above the 200-hour Simple Moving Average (SMA) near 1.3340. Prices continue to run above the near-term median since crossing the moving average at the outset of 2024’s trading.

Thursday’s bump in the USD/CAD drags the pair within reach of the 200-day SMA near the 1.3500 handle, but continued bullish momentum faces near-term technical resistance as the 50-day SMA declines, heading into a bearish crossover of the long-term moving average. The USD/CAD has closed flat or bullish for nine of the last ten consecutive trading days and is on pace to make it a tenth green day.

The USD/CAD is now up 2% from late December’s bottom bids near 1.3177 but remains down around 3.3% from October’s peak near the 1.3900 handle.

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