Canadian Dollar Climbs As Inflation Accelerates

The Canadian dollar strengthened against its major counterparts in the New York session on Tuesday, following the release of hotter-than-expected inflation data for October.

Data from Statistics Canada showed that the consumer price index rose 2.0 percent year-over-year in October, following a 1.6 percent increase in September. Economists had expected a 1.9 percent increase.

On a seasonally adjusted monthly basis, the CPI rose 0.3 percent versus a flat reading in September.

Core CPI, excluding food and energy, remained unchanged at 0.2 percent.

The CPI report lowered expectations for a bigger rate cut by the Bank of Canada in December.

The loonie touched 1.3968 against the greenback, setting a 6-day high. The currency is likely to locate resistance around the 1.36 level.

The loonie rebounded to 0.9098 against the aussie following the data, from an early 1-week low of 0.9139. If the loonie rises further, it is likely to test resistance around the 0.89 region.

The loonie rose to a 4-day high of 110.51 against the yen, from an early 4-day low of 109.25. The currency is poised to challenge resistance around the 112.00 level.

In contrast, the loonie held steady against the euro and was trading at 1.4796. This may be compared to an early 5-day high of 1.4766.