Strong CPI Pushes Canadian Dollar (FXC) Higher

The Canadian Dollar (CAD) rallied against its major counterparts across the board today, after the consumer price index for March took markets by surprise beating expectations significantly. It came out at 3.3% year over year and 1.1% over previous month, a lot stronger than the forecasted gains of 2.8% and 0.6% respectively. The core index also was higher at 0.7% month over month, while most of the analysts expected only a modest gain of 0.2%. The CPI is the most important indicator of the inflationary pressures for the Bank of Canada and most of the central banks around the globe, therefore, the higher number immediately triggered speculations that the monetary authorities will have to raise the rates sooner than previously expected, which in turn will make the currency more attractive. After the number was released, the Canadian currency surged against the US Dollar (USD), Euro (EUR) and the Japanese Yen (JPY) while trading stronger against other majors as well. The USD/CAD currency pair plunged from 0.9640 all the way to 0.9540 and the EUR/CAD dropped from 1.3770 to 1.3660s. The CAD/JPY, meanwhile, rallied from 85.60 to 86.50s.