Today, major reports on Canada's consumer inflation were released. They showed that inflation had been accelerated. This fact is likely to be taken into account by the country's central bank.
According to the published data, the core consumer price index jumped to 6.5% year-on-year against a forecast decline to 4.2% from 4.8%. Core inflation added 1.0% on a monthly basis in March against expectations of a slowdown to 0.5% from 0.8%. Overall consumer inflation rose more significantly. It surged to 6.7% from 5.7% year-on-year with a forecast increase to 6.1%. Moreover, it rose to 1.4% month-on-month against expectations of a continued February reading of 1.0% in March.
Consequently, the Canadian dollar jumped sharply against the US dollar, though it was a short-term growth. Currently, the USD/CAD pair may continue to fall, for example to 1.2480, consolidating below 1.2545. This dynamics is likely to be favored by the expectations of a more rapid rise of interest rates by the Central Bank of Canada as well as crude oil high prices. Besides, the Canadian dollar is considered a commodity currency like the Russian ruble. Therefore, it is extremely sensitive to an increase or decline in oil prices.
