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Canadian dollar gets stronger as traders digest the April inflation report


19.05.2022
Canadian dollar gets stronger as traders digest the April inflation report

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar             1.2775-1.2875

Euro                     1.3450-1.3550

Sterling                1.5900-1.6000

 

WTI Oil (opening level) $108.00(Oil price is down $7.00 from yesterday's opening level)

The US Dollar Index is marginally weaker this morning which is a bit of a surprise as global stock exchanges were crushed yesterday and are again looking like they will have a bad day today. The Euro is a little higher again this morning and trading above 1.05 against the Greenback as there is a growing expectation among investors that the ECB will need to get tough on interest rates in the very near future. We have seen a few sessions lately where the Greenback has traded weaker so it will be interesting to see if the trend of strengthening over the past couple of years is starting to slow down or this is just a temporary reaction to current events.

The Canadian Dollar is marginally stronger this morning as it was led higher by the April inflation report that showed inflation is not moderating in Canada but grew by 0.1% more than expected to a rate of 6.8%. This is the largest rise in prices in 31 years so most definitely we will see the Bank of Canada bump up interest rates by 0.50% at their next meeting (June 1st) which should lend some support to the Loonie in the near future.

Lots of secondary data in both the US and Canada today, I think all investors eyes will remain focused on the stock market as another big drop will get investors very worried about a slowdown in economic growth in the US and the fear of Stagflation will begin to grow.

 



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US Dollar             1.2800-1.2900

Euro                     1.3500-1.3600

Sterling                1.5550-1.5650

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