CANADIAN DOLLAR FALLS AFTER INFLATION DATA SHOWS FURTHER COOLING IN JUNE
- The Canadian Dollar declines after the release of lower-than-forecast inflation in June.
- The data indicates a greater probability the Bank of Canada will lower interest rates again in July.
- The US Dollar strengthens meanwhile, after US Retail Sales data, pushing USD/CAD higher within its range.
USD/CAD is trading higher, and has broken above 1.3700, after the release of Canadian Consumer Price Index (CPI) data for June showed an easing of inflationary conditions in Canada. The data further raises the prospect of the Bank of Canada (BoC) cutting its key interest rate again at its July 24 policy meeting, after already cutting its policy rate by 0.25% to 4.75% in June.
Lower interest rates generally depreciate a currency as they reduce foreign capital inflows. The Canadian Dollar (CAD) is weakening against the US Dollar (USD) after the release – as USD itself pumps higher in most pairs following the release of US Retail Sales data at the same time as Canadian CPI was published
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