The Canadian dollar retreated from its early highs against its major rivals in New York deals on Friday, as nation’s consumer prices grew less-than-expected in September.
Data from Statistics Canada showed that consumer prices rose 1.0 percent on an annual basis in September, following 1.3 percent rise last month. This was also lower than the expected 1.1 percent growth.
Core consumer prices grew 2.1 percent on year, same as last month. Economists had expected an inflation rate of 2.2 percent.
The consumer prices fell 0.2 percent on month, steeper than expectations for a decline of 0.1 percent. The inflation was flat in August.
On a monthly basis, the Bank of Canada’s core consumer price index rose 0.2 percent, matching August’s estimate. The reading was slower than forecasts for a 0.3 percent gain.
Oil prices also fell, with crude for December delivery falling $0.94 to $44.44 a barrel. Optimism over China stimulus measures did little to support crude, as persistent concerns over supply glut offset positive tone in markets.
In European deals, the currency rallied, as investors cheered China stimulus and the European Central Bank President Mario Draghi’s dovish tone on QE.
Subsequent to the data, the loonie weakened to a 3-week low of 1.3198 against the greenback, off early 2-day high of 1.3040. The pair was worth 1.3088 when it ended yesterday’s trading. The loonie may possibly locate support around the 1.33 level.
The loonie reversed from an early more than 2-month high of 1.4445 against the euro with the pair trading at 1.4532. If the loonie extends slide, it may find support around the 1.46 mark.
Preliminary figures from a Markit Economics survey showed that Eurozone private sector growth unexpectedly strengthened in October to its fastest pace in two months, led by the surprise improvement in the services activity, while manufacturing expansion held steady.
The flash composite purchasing managers’ index that represents both manufacturing and services rose to a two-month high of 54 from 53.6 in September. Economists had expected a score of 53.4.
Pulling away from a 3-day high of 92.59 hit at 7:15 am ET, the loonie edged down to 91.65 against the Japanese yen. The loonie is seen finding support around the 90.00 area. At Thursday’s close, the pair was valued at 92.20.
The leading index for Japan, which measures the future economic activity, dropped as initially estimated in August to the lowest level in fifteen months,according to report from the Cabinet Office.
The leading index dropped to 103.5 in August, confirming the flash data, from 105.0 in the previous month.
The loonie fell to a 10-day low of 0.9536 against the aussie, and has been steady thereafter. At Thursday’s close, the pair was worth 0.9432.
The material has been provided by InstaForex Company – www.instaforex.com