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Canadian Dollar Climbs After CPI Data

09:39, 19th September 2014

(RTTNews) - The Canadian dollar climbed against its major rivals in on Friday, as the nation's consumer prices came in flat in August, in line with forecasts.

Data from Statistics Canada showed that Canada's consumer prices were flat on month in August, following a 0.2 decline in the previous month.

Annual inflation was 2.1 percent in August, matching expectations as well as the July reading.

Core CPI jumped 0.5 percent in August, compared to reading of -0.1 percent a month earlier. This beat the forecasts for an increase of 0.2 percent.

On year, the core CPI rose to 2.1 percent from 1.7 percent in July. Economists were expecting an increase of 1.8 percent.

The core rate is the Bank of Canada's preferred indicator for achieving its 2 percent inflation target, which is the key determinant for setting official interest rates

Reversing from an early low of 1.0979 against the greenback, the loonie climbed to an 11-day high of 1.0886. The pair was worth 1.0933 at yesterday's close. The next possible resistance for the loonie lies around the 1.08 zone.

After a brief pause, the loonie climbed back to 99.78 against the yen. The loonie is thus heading to violate its early 19-month high of 99.81. If the loonie extends rise, it may find resistance around the 103.00 region. The loonie-yen pair was trading at 99.35 when it ended Thursday's deals.

The Japanese government downgraded its overall economic assessment for the first time in five months in September, citing stagnation in private consumption growth, the monthly economic report released by the Cabinet Office showed.

The Cabinet Office assessed that the Japanese economy is on a moderate recovery, but saw weakness in some areas.

After declining to 0.9857 against the Australian dollar earlier, the loonie spiked up to a 7-1/2-month high of 0.9789. Further uptrend may take the loonie to a resistance around the 0.97 region.

The loonie rallied to 1.4013 against the euro, a level untouched since November 2013. This may be compared to Thursday's closing quote of 1.4128. The loonie is poised to find resistance around the 1.39 level.

Germany's producer prices decreased at a stable rate as expected in August, data from Destatis showed.

Producer prices fell 0.8 percent year-over-year in August, the same rate as in July.

Looking ahead, U.S. leading indicators for August are due shortly.

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