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Loonie Extends Rally After Canada CPI

09:17, 21st November 2014

(RTTNews) - The Canadian dollar continued to trade in positive territory on Friday, as nation's consumer prices rose more-than-forecast in October, driven by higher prices for shelter and food.

Data from Statistics Canada showed that Canada's consumer prices grew 0.1 percent on a monthly basis in October, same rate as in the previous month. The index was expected to decline to 0.2 percent.

Annually, CPI advanced to 2.4 percent following the 2.0 increase in September. This is up from a 2.1 percent increase predicted by the economists.

Core CPI came in at 0.3 percent on month, which was expected to match last month's 0.2 percent rise. On year, core CPI grew 2.3 percent, up from forecast of 2.1 percent increase. In September, the index grew 2.1 percent.

The Bank of Canada aims to keep inflation at the 2 percent midpoint of an inflation-control target range of 1 to 3 percent.

The loonie strengthened to a 3-week high of 1.1190 against the greenback, off early low of 1.1325. If the loonie extends rise, it may test resistance around the 1.11 zone.

The loonie hit a fresh 1-year high of 1.3904 against the euro and more than a 6-year high of 105.30 against the yen, after falling to 1.4204 and a 2-day low of 103.87, respectively in prior deals. Extension of bullish move may lead the loonie to resistance levels of 106.00 against the yen and 1.375 against the euro.

Reversing from an early 2-day low of 0.9842 against the aussie, the loonie drifted higher to 0.9738. Next key resistance for the loonie may be located near the 0.965 mark.

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