With Canada’s CPI falling sharply, should we watch the direction of the Canadian dollar?

With Canada’s CPI falling sharply, should we watch the direction of the Canadian dollar?

21.02.2024

In yesterday’s U.S. currency trading, the Canadian dollar plummeted against the yen after Canada’s January Consumer Price Index, released yesterday, showed a sharp year-over-year decline from 3.4% the previous month to 2.9%. The CAD/JPY pair fell from 111.432 to 110.669.It broke below the 200-period SMA on the hourly chart. On the 4-hour chart, the 75-period MA is acting as a support level, and the pair has rebounded during today’s Asian session, so we should watch for a potential rebound during U.S. trading hours.

European currencies saw the euro emerge as the strongest currency during U.S. trading hours after yesterday’s release of the Eurozone’s December construction output data showed an improvement from the previous month’s year-on-year decline of 2.2% to a 1.9% increase. The euro rose against the U.S. dollar from 1.0761 to 1.0838, breaking above the 200-day simple moving average (SMA) on the daily chart.The daily RSI is showing an upward trend at 48.5, so we will be watching closely to see if further gains will follow.

Today’s economic indicators include Japan’s customs-based trade balance at 8:50, Australia’s wage index at 9:30, the UK’s net public sector debt and Turkey’s consumer confidence index at 16:00, Indonesia’s 7-day reverse repo rate at 16:20,at 5:00 PM, South Africa’s Consumer Price Index; at 9:00 PM, the U.S. MBA Mortgage Applications Index; at 10:00 PM, remarks by Bostic, President of the Atlanta Fed; at 3:00 AM, the U.S. 20-year Treasury auction; and at 4:00 AM, the release of the FOMC minutes. We will closely monitor the direction of the Canadian dollar, which fell sharply following a significant drop in Canada’s CPI.

Past Market Reports

1. 20.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 13.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 07.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran