Intraday Market Thoughts

Loonie is Day's Biggest Loser after Inflation Plunge

by Ashraf Laidi
May 17, 2013 14:25

CAD is the day's worst performing currency after Canada's April inflation fell to 0.4% y/y from a 1.0% rise in March, posting the biggest decline since October 2009. Core CPI also fell, reaching 1.1% from 1.4% in March. The Canada inflation news bears tremendous significance for the Bank of Canada, which is the least dovish of G5 central banks. Banking on further CAD declines has been one of the primary themes in our Premium Insights, as we warned in Thursday's USDCAD trades about the CPI catalyst. Both of our USDCAD longs have hit their final targets of 1.0295 and 1.0260, with entries averaged at 1.0150. AUDUSD shorts and EURAUD longs hit their final target, while EURUSD awaits the final target at 1.2810 after an average entry at 1.2950. CADJPY and 1 of 2 GBPUSD were stopped out. All the Premium trades and their rationale are in the Latest Premium Insights.

Act Exp Prev GMT
BoC CPI Core (APR) (m/m)
0.1% 0.2% 0.2% May 17 12:30
CPI (APR) (m/m)
-0.2% 0.0% 0.2% May 17 12:30
BoC CPI Core (APR) (y/y)
1.1% 1.2% 1.4% May 17 12:30
CPI (APR) (y/y)
0.4% 0.6% 1.0% May 17 12:30
CPI - Core (APR) (m/m)
0.0% 0.3% May 17 12:30
 
 

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