Canadian Dollar Broadly Higher After CPI Exceeded Forecasts

Market Reviews

The euro continues to trade lower against the US dollar, as the data released today on Germany's GDP and the Eurozone's CPI coincided with the forecasts and could not support the single currency. Germany's gross domestic product grew by 0.6% in the fourth quarter of 2017, but growth was slower than the 0.7% expansion seen in the third quarter. On an annualized basis, GDP increased at a faster rate, 2.9%, after rising 2.7% in the previous quarter. For the whole 2017, GDP grew by 2.2% compared to 1.9% growth in 2016.

Consumer price growth in the Eurozone slowed somewhat in January, but the basic measure, which is tracked by the European Central Bank, rose slightly for the first time in recent months. Eurostat data showed that consumer prices in the euro area fell by 0.9% in January compared to the previous month, and grew by 1.3% year-on-year. CPI core rose by 1.0% yoy.

Canadian dollar rose sharply after CPI report, and is now trading as the strongest one for today. CPI increased by 0.7% mom, 1.7% yoy in January. The annual rate slowed from 1.9% yoy in December but beat expectation of 1.5% yoy. CPI core common accelerated to 1.8% yoy, up from 1.6% yoy. CPI core median was unchanged at 1.9% yoy. CPI core trim slowed to 1.8% yoy, down from 1.9% yoy.