BREAKING: USDCAD jumps after Canadian core inflation accelerates

Canadian CPI inflation data for October was released today at 1:30 pm GMT. Market expected headline price growth to remain unchanged at 6.9% YoY and actual data matched this expectations. However, a noticeable beat was reported when it comes to core inflation with gauge accelerating from 5.9 to 6.2% YoY, in spite of an expected deceleration to 5.9% YoY.

Release showed consumer price growth in the Canadian economy remaining at elevated levels, giving the Bank of Canada reasons to continue to tighten policy. BoC has raised rates by a cumulative 350 basis points since March - the most aggressive tightening cycle in Bank's history.

Headline

• Year-over-year: 6.9% YoY vs 6.9% YoY expected (6.9% YoY previously)

• Month-over-month: 0.7% MoM vs 0.8% MoM expected (0.1% MoM previously)

Core

• Year-over-year: 6.2% YoY vs 5.9% YoY expected (6.0% YoY previously)

CAD saw some reaction to the data with USDCAD jumping around 0.3% in a knee-jerk move. However, it should be noted that the move was driven mostly by better-than-expected US retail sales data that was released simultaneously.

While USDCAD jumped in a knee-jerk move following US retail sales and Canadian CPI data, overall technical picture for the pair remains unchanged - pair continues to realize downside breakout from a head and shoulders pattern with textbook range pointing to a drop to 1.3060. Source: xStation5