News and price action were relatively centered on the Canadian dollar during the session today. Oddly enough, traders weren?t expecting the underlying CAD to make a bold move in the summer months against the US dollar, with expectations standing next to nil on a move by the Bank of Canada.
However, now with domestic expansion churning away and consumer price inflation ticking higher, market sentiment is on the side of not one, but two possible rate hikes by the end of the year. The notion was confirmed following the consumer price index released in the New York morning. Rising in line with consensus estimates, the core figures ticked higher than the 0.2 percent figure seen in the month of April. The monthly assessment led the core annualized figure higher, printing a 2.2 percent pace. Now clearly above the benchmark target set by the central bank, policy makers are expected to move on July 10th, the scheduled time for the next meeting. With economic data apparently in favor of the decision, no one should be surprised should we see a clear test of 1.0500 in the near term.