Canadian Dollar gets dragged down on Tuesday as Crude Oil slumps, US CPI inflation meets expectations

• The Canadian Dollar sheds weight on Tuesday, walks back the early week’s gains.
• Economic data from Canada remains absent on the calendar.
• Crude Oil is plunging as markets reassess slowing global growth causing demand declines to outpace production cuts.

The Canadian Dollar (CAD) fell back on Tuesday as markets shuffled their stance following US Consumer Price Index (CPI) inflation figures that exactly met market expectations, pointing to dwindling growth looking forward. 

Canada sees little to no meaningful data on the economic calendar this week, leaving the CAD to get dragged around the charts by the broader market. Crude Oil markets are seeing broad declines on declining demand concerns, further pressuring the Loonie.

Daily Digest Market Movers: US CPI meets the street to print at expectations, price growth slowly cools

• The Canadian Dollar sees losses across the board on Tuesday, with slight to moderate declines against all of the CAD’s major currency peers.
• The CAD’s weakest performance sees it down six-tenths of a percent against the Japanese Yen (JPY), and half a percent against the Swiss Franc (CHF).
• The Loonie’s ‘strongest’ performance is against the Australian Dollar (AUD), down around a sixth of a percent against the Antipodean, with a close second going to a fifth of a percent decline against the post-CPI US Dollar (USD).
• US Consumer Price Index (CPI) inflation met the street exactly at expectations across the board, with headline annualized CPI inflation ticking down from 3.2% to 3.1%, and the MoM figure ticking up slightly from a flat 0.0% to 0.1%.
• Core CPI inflation (headline inflation less volatile food and energy prices) held steady at 4% for the YoY figure, with November’s MoM Core CPI printing slightly higher at 0.3% versus October’s 0.2%.
• Crude Oil markets are taking a leg down in the face of declining price growth from the US, adding further weight to ongoing energy market concerns about declining fossil demand eclipsing global production cuts, specifically from the Organization of the Petroleum Exporting Countries (OPEC).
• US West Texas Intermediate (WTI) Crude Oil slips back to $69.00 per barrel.
• The Canadian Dollar is getting dragged down in lockstep with deflating Crude Oil bids.
• Next up for markets will be the Federal Reserve’s (Fed) Monetary Policy Statement and updates to its Interest Rate Projections, both due on Wednesday at 19:00 GMT and to be followed up by a Press Conference at 19:30 GMT.
   

Technical Analysis: Canadian Dollar trips over slumping Crude Oil, follows WTI down and sends the USD/CAD back over 1.3600

The Canadian Dollar (CAD) looks for the basement on Tuesday, backsliding across the board and shedding weight against all of its major currency peers. 

The USD/CAD has regained the 1.3600 handle after catching a topside break of consolidation between the 50-hour and 200-hour Simple Moving Averages (SMA) in the 1.3580 to 1.3560 zone.

The USD/CAD is toying with last week’s highs near 1.3620 after rebounding from familiar near-term lows at 1.3550. The pair is at risk of hardening into a sideways consolidation range, but the US Dollar (USD) is setup for further breakouts following central bank action on Wednesday.

The USD/CAD continues to hold chart territory north of the 200-day SMA just above the 1.3500 handle, keeping bid above the major moving average, but immediate topside momentum remains constrained by the 50-day SMA near 1.3700.

USD/CAD Hourly Chart

USD/CAD Daily Chart