FX.co ★ Canadian Dollar Steady After Inflation Data

The Canadian dollar stabilized around 1.4 against the US dollar, remaining close to its six-month low, as market participants assessed unexpectedly high inflation figures and recent developments in trade, alongside a recovering US dollar. In September, headline consumer prices climbed to 2.4%, surpassing the anticipated 2.3% and marking the highest level since February. The mean core inflation measure stayed close to its one-year peak at 3.1%, exceeding the 3% market estimate, which reduces the Bank of Canada's flexibility to adjust monetary policy. On the trade front, announcements of a potential US–Canada agreement concerning steel, aluminum, and energy, potentially set for endorsement at the upcoming APEC summit, have bolstered the trade outlook by enhancing short-term export prospects. Concurrently, the US dollar has gained strength amid optimism surrounding the resolution of the government shutdown and progress in trade negotiations with China.