The Canadian dollar weakened against the US dollar due to hawkish comments from Federal Reserve officials, indicating prolonged elevated interest rates, boosting the greenback. The ongoing US-Russia negotiations on the Ukraine conflict also present a dual outcome for the Loonie. Recent inflation data shows a modest year-on-year increase in the Consumer Price Index, primarily from energy costs, though food prices have notably declined. Shelter prices continue to rise, affecting the Bank of Canada's policy decisions. Investor sentiment will hinge on forthcoming economic indicators, influencing potential currency fluctuations.
The Canadian dollar weakened against the US dollar as hawkish Federal Reserve remarks signaled continued elevated interest rates, strengthening the greenback.
US-Russia talks regarding Ukraine may influence the Canadian dollar's fortunes, potentially leading to bullish momentum or increased safe-haven asset inflows based on outcomes.
Latest inflation data indicated a year-on-year CPI growth of 1.9%, driven by energy, while a decline in food prices offers mixed signals for the Loonie's outlook.
Domestically, inflationary pressures reflected in rising shelter costs could impact the Bank of Canada's rate-cut cycle, providing some support for the Canadian dollar.
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