The Canadian dollar is showing signs of strength, influenced by a combination of factors including inflation data, oil prices, and a softening US dollar. While headline inflation in Canada unexpectedly rose, underlying price pressures showed some moderation. Oil prices are also providing support to the loonie, driven by steady export flows, constrained supply growth, and resilient demand.
- The Canadian dollar strengthened past 1.38 per US dollar.
- Headline inflation in Canada unexpectedly rose to 2.4% in December.
- The median core inflation rate eased to a one-year low of 2.5%.
- The loonie has drawn support from oil amid steady export flows to the US.
- The US dollar weakened following renewed tariff threats from Washington.
- USD/CAD hovers around 1.3800 as US-EU tensions ease.
- Oil prices gain as Saudi Aramco’s CEO downplays oversupply.
The Canadian dollar’s performance appears to be bolstered by a mix of domestic economic factors and global dynamics. Inflation data, while showing some upward pressure, also indicates underlying moderation, which could influence future monetary policy decisions. The currency also benefits from robust oil prices and trade flows, offering stability to Canada’s economic outlook. Meanwhile, a weaker US dollar due to geopolitical tensions further contributes to the relative strength of the Canadian currency.