USD/CAD rallies to 1.4167 as October US CPI prints at 0.4% MoM, fueling Fed rate hike bets, while WTI crude oil slides to its lowest point since August 31.
October US CPI beat forecasts (0.4% MoM headline, 0.3% core vs 0.2% expected), pushing traders to price an 85.3% chance of a December Fed hike and lifting USD/CAD 0.34% to around 1.4167, its highest since October 16. Falling Oil near $84, the weakest level since August 31, adds a second bearish leg for CAD as a major crude exporter.
The October CPI beat (0.4% MoM headline, 0.3% core vs 0.2% expected) reinforced expectations of a December Fed rate hike, and the dollar clawed back about half of the previous day's losses. The DXY climbed toward 102.00 from an intraday low of 101.49 and gained against all majors, most against the Australian Dollar (+0.73%).
WTI slipped toward $84 a barrel, the lowest level since August 31 and down more than 15% this month, as US President Trump cited 'positive momentum' toward ending the war with Iran after talks with Qatar's prime minister on Monday. Any de-escalation reduces supply-risk premiums in the price.
The Canadian Dollar is hit from two directions: US CPI strength lifts the greenback, and WTI near $84, its lowest since August 31, cuts into Canada's crude export earnings. Canadian employment also fell 4.7K in October, the third straight monthly decline, versus an expected gain of 13.6K, complicating the BoC's policy outlook.
The USD/CAD pair climbed 0.34% to 1.4167, its highest level since October 16, as stronger-than-expected US inflation data bolstered the greenback. Simultaneously, the Canadian Dollar faces headwinds from sliding oil prices, which have dropped over 15% this month to near $84 per barrel amid diplomatic hopes for a US-Iran deal.
It trades around 1.4167, up 0.34% on the day, the highest level since October 16.
October inflation came in hotter than expected, which reinforced expectations that the Fed will raise rates in December and lifted the Dollar Index toward 102.00.
Hopes for US-Iran diplomacy, with Trump citing 'positive momentum' toward ending the war after talks Monday, are easing supply fears and pushing WTI toward $84, its lowest since August 31.
Hot US inflation strengthened the US Dollar, and sliding Oil prices, down to around $84 amid US-Iran diplomacy hopes, weigh on Canada's crude export earnings; Canadian jobs data also missed, with employment down 4.7K in October.