As Canadians, we are “privileged” to live in a country plagued by -40° C temperatures, ice storms, hurricanes, and tons of snow in the winter and +30° C temperatures, flooding, tornadoes, mosquitoes, and black flies in the spring and summer…and, we live in constant threat of earthquakes along the West Coast.
Now, we are “privileged” to learn that inflation is, indeed, alive and well in Canada. This report released today from Statistics Canada shows that the Consumer Price Index (CPI) rose 2.3% in the 12 months to May, following a 2.0% increase in April…their breakdown is as follows.
In response, the Canadian Dollar is trading higher again today (Friday), as shown on the following 10-Year Weekly chart of USD:CAD. There is currently minor Fibonacci support around 1.08, while the 1.10 level has been quite “noisy” this year.
Any plunge and hold below the 1.065 major support level may pose some cause for concern on the part of the Bank of Canada, particularly if inflation continues to rise or remain elevated…if it does, we’ll see whether it creeps across the border into the U.S.
So, rate hike ahead for Canada?…or, even the U.S.?