The USDCAD has moved down to test the 200 hour moving average as Bank of Canada Deputy Gov. Carolyn Rogers speaks on the economy and specifically inflation after the higher-than-expected report today.
Rogers is says:
- CPI is too high; it's hurting Canadians and keeping us up at night
- we are seeing some impact of higher rates, sites moderation and housing market
- thinks it's a little ways away yet before inflation starts to bend down
- we do need to see price leveling off; not to continue to increase; that alone will start to bring inflation down
- a complete retrenchment from globalization would probably have a negative impact on low and stable inflation
- what's going on in the Canadian labor market right now is perfectly clear
- balance of risk tilted to the upside on inflation
- asked about a 75 basis point rate hike says, we will take the July decision when we get to July
The CPI data came in much higher than expected today with the headline moving up to 7.7% vs. 7.4% expected. As a result, CIBC is saying that is a near certainty that the Bank of Canada raise rates by 75 basis points at the next meeting.
Meanwhile, the USDCAD is down testing its 200 hour moving average 1.29238 after dipping below the 100 hour moving average earlier helped by Powell comments and a delayed reaction to the CPI (perhaps).
A move below the 200 hour moving average, would have traders looking toward the 1.28845 area followed by the 38.2% retracement 1.28637. The low price from last Thursday reached just below that retracement level at 1.28597. Move below the 30.2% retracement would increase the bearish bias even further in the short-term.
Conversely hold the 200 hour moving average, and traders continue to battle between the 100 hour moving average above (blue line in the chart above) and the 200 hour moving average below
