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Canadian Dollar Recovers After In Line Inflation Data

Canadian Dollar Recovers After In Line Inflation Data

The Canadian dollar trimmed its early losses against its major counterparts in the European session on Wednesday, after the release of the nation’s consumer inflation data that meet forecasts for the month of October.

Data from Statistics Canada showed that consumer prices grew 0.3 percent on a seasonally adjusted monthly basis in October following a 0.1 drop in the previous month. The rate matched economist estimates.

Core inflation, excluding food and energy, rose 0.2 percent from 0.1 percent in September.

The data helped to reduce early decline in the currency led by receding hopes about a trade deal between the U.S. and China anytime soon.

Crude oil prices also recovered from early losses, due largely to bargain hunting after two successive days of sharp losses.

Traders await official weekly crude inventory data from U.S. Energy Information Administration, due at 10.30 am ET.

The loonie rose to 1.4686 against the euro, from near a 3-month low of 1.4736 hit at 5:30 am ET. Next key resistance for the loonie is seen around the 1.44 mark.

Data from Destatis showed that Germany producer prices declined for the second straight month in October largely driven by energy prices.

Producer prices fell by 0.6 percent year-on-year in October, bigger than the 0.1 percent drop in September. This was the second straight decrease. Economists had forecast an annual 0.4 percent fall.

The loonie bounced off to 81.74 against the yen, from near 6-week low of 81.42 seen at 5:30 am ET. If the loonie rises further, 83.5 is possibly seen as its next resistance level.

Data from the Ministry of Finance showed that Japan posted a merchandise trade surplus of 17.3 billion yen in October.

That was well shy of expectations for a surplus of 301.0 billion yen following the 124.8 billion yen deficit in September.

After falling to near a 6-week low of 1.3315 at 5:30 am ET, the loonie regained some strength against the greenback and was trading at 1.3287. The loonie is seen finding resistance around the 1.30 area.

The loonie recovered to 0.9046 against the aussie, following a weekly decline to 0.9069 at 6:00 am ET. The loonie is likely test resistance around the 0.89 area.

Looking ahead, the Fed minutes from the October meeting are set for release at 2:00 pm ET.

The material has been provided by InstaForex Company – www.instaforex.com