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COZfx: USD/CAD nearly unchanged after US inflation

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COZfx: USD/CAD nearly unchanged after US inflation

Postby dwang » Thu Sep 18, 2014 2:01 am

COZforex: The U.S. dollar was almost unchanged against its Canadian counterpart on Wednesday, after the release of downbeat US inflation data as markets awaited the outcome of the Federal Reserve's policy meeting.

USD/CAD hit 1.0949 amid early US trade, the pair's lowest since September 11; the pair subsequently consolidated at 1.0963, dipping 0.06%. COZforex senior currency strategist Ian • Quigley said, USD/CAD is predicted to find support at 1.0938, and a drop through could take it to the next support line of 1.0897. Meanwhile, the pair is predicted to find its first resistance at 1.1046, and a rise through could take it to the next resistance line of 1.1113.

In a report, the Labor Department said that the US consumer price index drop 0.2% in August, pulling the annual rate of inflation down to 1.7% from 1.9% in July.

The unexpected slowdown in inflation was due to falling energy prices, the report said. Energy prices fell by 2.4% last month, including a 4.1% drop in gasoline prices.

But the dollar's losses were expected to remain limited by heightened expectations for an early hike in US interest rates ahead of the outcome of the Fed's monetary policy meeting later Wednesday.

The Fed was expected to cut its asset purchase program by another $10 billion after the meeting, which would keep it on track for winding up the program in October.

Fed Chair Janet Yellen was to hold what would be a closely watched press conference following the meeting.

The Canadian dollar had found support on Tuesday after data showed that Canadian manufacturing sales rose to a record high in July.

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