Why the 1.3160 is the Level to Watch Ahead of Canada’s CPI
July 20, 2018 12:41 pm
In the past few months, the US dollar has been the major gainer among the global currencies. The rise has been because of the Federal Reserve, which has remained quite hawkish, even with the ongoing trade crisis. In his testimony this week to congress, the Fed chair remained bullish about the US economy and supported the gradual interest rate hike started by his predecessor.
The stronger dollar has been supported by the economy, which is expected to grow by more than 4% in the second quarter. The economy continues to add more jobs, the jobless claims have fallen to the lowest level since 1969, wages are rising, inflation has been contained at or below the 2.0% target, and there are more vacancies than the people to fill them.
On the other hand, Canada has released encouraging jobs and retail sales data this month. The Bank of Canada has come out in support of tightening in the near future, even with the cloud of trade hanging. Today, the country will release the CPI numbers for the month of June. The numbers are expected to show that the CPI rose by 2.4%, which will be higher than May’s 2.2%. The core CPI is expected to rise by 1.4%, which will be higher than last month’s 1.3%. If the inflation numbers continue to move up, there will be a more likelihood of a rate hike, which will push the Loonie higher.
The pair has reached 1.3260. In the past few days, the pair has traded within this range as traders wait for the inflation numbers. The range trading came after the pair rose after the statement by the BOC. There is a likelihood that the pair will drop to test the important support level of 1.3160.
In the past few months, the US dollar has been the major gainer among the global currencies. The rise has been because of the Federal Reserve, which has remained quite hawkish, even with the ongoing trade crisis. In his testimony this week to congress, the Fed chair remained bullish about the US economy and supported the gradual interest rate hike started by his predecessor.
The stronger dollar has been supported by the economy, which is expected to grow by more than 4% in the second quarter. The economy continues to add more jobs, the jobless claims have fallen to the lowest level since 1969, wages are rising, inflation has been contained at or below the 2.0% target, and there are more vacancies than the people to fill them.
On the other hand, Canada has released encouraging jobs and retail sales data this month. The Bank of Canada has come out in support of tightening in the near future, even with the cloud of trade hanging. Today, the country will release the CPI numbers for the month of June. The numbers are expected to show that the CPI rose by 2.4%, which will be higher than May’s 2.2%. The core CPI is expected to rise by 1.4%, which will be higher than last month’s 1.3%. If the inflation numbers continue to move up, there will be a more likelihood of a rate hike, which will push the Loonie higher.
The pair has reached 1.3260. In the past few days, the pair has traded within this range as traders wait for the inflation numbers. The range trading came after the pair rose after the statement by the BOC. There is a likelihood that the pair will drop to test the important support level of 1.3160.
The post Why the 1.3160 is the Level to Watch Ahead of Canada’s CPI appeared first on Forex.Info.
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