USD/CAD Surges on Falling Oil Prices and Tepid US Inflation
The Canadian Dollar (CAD) took a hit on Friday as oil prices plummeted and US inflation data failed to boost the Greenback. The USD/CAD rose by 0.27% to trade around 1.3870, with a daily high of 1.3882 in reaction to the US Consumer Price Index (CPI).
The August CPI numbers were released on Friday and showed a 3.4% year-over-year increase, unchanged from the previous month and in line with market expectations. However, the underlying core inflation figure, which excludes volatile food and energy components, rose by 0.3% monthly, exceeding the forecast of 0.2%. On an annual basis, core inflation eased to 2.4% from 2.5% in July.
The US Dollar initially strengthened following the release due to the stronger-than-expected monthly increase in core inflation. However, it struggled to retain its gains as the annual figures showed no renewed acceleration in inflationary pressures.