The Canadian dollar is almost unchanged in the Tuesday session. Currently, the pair is trading at 1.3390, down 0.02% on the day. In economic news, U.S. there were no surprises from consumer inflation numbers. Core CPI edged down to 0.1%, shy of the estimate of 0.2%. CPI remained steady at 0.2%. On Wednesday, the U.S. publishes PPI and durable goods orders data. There are no Canadian events until Thursday.
The Canadian dollar lost close to 1.0% last week, but ended the week with gains and has continued the upward trend this week. On Friday, the U.S. economy posted a shocking nonfarm payroll report, with a gain of only 20 thousand jobs. The Canadian economy did much better, creating 55.9 thousand jobs, its second sharp gain in as many months. However, other key numbers have been soft, such as two successive GDP readings of -0.1%. The Bank of Canada has said that it expects the economy to improve, but the dovish rate statement from the BoC is a sign that policymakers are unlikely to raise rates before the second half of 2019. With no interest rate hikes on horizon, investor appetite for Canadian dollars could soften.
U.S. inflation numbers remain well below the Federal Reserve’s inflation target of 2.0 percent. This has given the Fed plenty of breathing room regarding rate hikes, as policymakers continue to signal that the Fed could hold off until the second half of the year. The dovish stance of the Fed could weigh on the dollar, as a lack of rate hikes makes the greenback less attractive to investors.