CADJPY Struggles at 100 Level Ahead of Japanese Inflation

The CADJPY is looking to close lower at the 100.00 level for the second time in less than a week. That could see some bearish action in the pair after the Japanese inflation release on Wednesday.

CADJPY – Daily Chart

CADJPY-Daily-ChartSupport for a move lower in the pair comes in at the 99.00 level, where a 50 moving average sits, and getting below opens a deeper correction.

The selling of the Canadian dollar came after a weaker inflation number, making an interest rate pause more likely. Canada’s annual inflation eased more than expected in January to 5.9%, according to data on Tuesday. A price slowdown should allow the Bank of Canada to keep interest rates steady at its next meeting as it lets the market absorb previous rate hikes.

Analysts expected inflation to slow from 6.3% to 6.1% in December. The monthly reading saw the consumer price index rising 0.5%, Statistics Canada said, which was also lower than analysts’ forecast of a 0.7% gain after a 0.6% decline in December.

The latest reading “allows the BoC to stay on hold in March, despite the fact that the labor market was extraordinarily hot in the month of January,” said Andrew Kelvin, chief strategist at TD Securities.

The market will then have Japanese inflation reading on Thursday, with last month’s number rising again to 4%.

The market is not expecting any change from the BOJ after the central bank skipped rate hikes while other global policymakers ramped up borrowing rates. Now that those banks are slowing, the BOJ can leave rates unchanged and allow some higher prices to be absorbed after years of deflationary pressures.

At The Economic Club of Washington, Powell said the “extraordinarily strong” January job report surprised the Fed. Oil prices remain weaker under the $80 level, which has also kept a lid on the progress of the CAD.

Recent News
Start Trading Now !

Try our demo account for free to learn trading. When you’re ready, switch to a live account and start trading for real.

Popular posts
ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://atfxgm.eu/en/ to proceed.

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://atfxconnect.com