Daily Currency Update
CAD - Canadian DollarThe Canadian Consumer Price Index (CPI) rose at a faster pace year-over-year in February (+1.1%) than in January (+1.0%). Excluding gasoline, the CPI rose 1.0% in February—down from a 1.3% increase in January. As consumer prices account for most of the overall inflation, the CPI is important to currency valuation. Rising prices could lead the central bank to raise interest rates out of respect for their inflation containment mandate.South of the border today, the Federal Reserve concludes its first meeting today since the $1.9 trillion stimulus package was passed. Although most believe that the Fed won’t make major policy changes, investors are watching closely.The demand for Canadian dollar was relatively flat overnight. USDCAD didn’t trade above 1.25 and has not done so since March 12.
Key Movers
The pound has been surprisingly quiet, with direction being taken from other currencies including the euro and USD. GBPUSD did break above the magic 1.39 overnight, having spent much of yesterday in the 1.38s. GBPEUR also broke the psychological 1.17 barrier in the early hours of this morning but it is yet to be seen if this break can be sustained.The euro tracked below 1.19 as Europe’s vaccination roll out remains in disarray with 16 countries now suspending the AstraZeneca vaccine from their roll-out schedule. Authorities remain adamant the benefits continue to outweigh the risks. Italy and Germany introduced new social distancing measures in a bid to curtail fresh outbreaks.The Australian dollar tracked sideways through trade on Tuesday, maintaining a narrow range centered around resistance at 0.7750 and support on moves approaching 0.7710. Price action across financial markets was muted in general as investors appear content in maintaining the current holding pattern and brushing aside volatility across macroeconomic data sets. US retail sales and industrial production both tracked lower through February yet were ignored by investors who instead set their focus toward future optimism.
Expected Ranges
- EUR/CAD: 1.480 - 1.487 ▼
- GBP/CAD: 1.728 - 1.734 ▼
- AUD/CAD: 0.961 - 0.965 ▲
- USD/CAD: 1.243 - 1.248 ▼