FX Blog

Daily Market Updates & FX News

FX Blog

Daily Market Updates & FX News

FX Blog

Daily Market Updates & FX News

Data out of Canada proved positive this morning with both CPI and Core CPI numbers coming out as beats over expectation. Core CPI came out at 0.2% against the forecast 0.1% and CPI was -0.2% vs. the expectation of -0.4%. These increasing inflation numbers further decrease the chance of another rate cut next week. This bolstered some temporary CAD strength this morning but has since completely retraced and now sits about a cent lower than its morning high.
A news heavy morning out of the US has seen mixed data released but overall upward momentum from USD. CPI, Unemployment claims and Core Durable Goods Orders were all reported as misses of 0.1%, 25K and 0.3% respectively. While Core CPI beat its 0.1% expectation coming out at 0.2% and Durable Goods Orders came out at 2.8% vs. the forecast 1.7%. Positive core CPI numbers, paired with Bullard’s “patience” removal statement, increase the anticipation of a Fed rate hike sooner rather than later. USD has shown some good strength on this bullish sentiment and looks to push further upwards on the back of this statement and data.
EUR enters today’s session completely flat to yesterday’s close having traded within a very tight range during the Asian and European sessions. Today’s fundamental data releases were encouraging with higher money supply growth as well as better than expected employment gains in Germany. As the Greek situation simmers down, the next big news release out of Europe is the March 2nd flash CPI which is followed by March 5th ECB meetings.
Crude is down just over 2.5% already this morning but has dropped off as a main driver of CAD. CAD has recently shown a growing correlation between CAD-USD interest rate spreads as well as large moves in USD. If oil were to break out of its recent range, it could prove to return as a major driver of CAD strength or weakness.
Equities are mixed this morning with markets reacting to the heavy data being released this morning: the Dow is down 0.08%, S&P down 0.15%, NASDAQ up 0.07% and the TSX up 0.22%. Crude Oil is down 2.67% this morning ($49.63) while Gold is up 0.56% this morning ($1,208.20).

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