Canadian Dollar on the flat side for Friday as markets chew on US PPI print

• Canadian Dollar on weaker footing approaching the closing bell.
• Canada foreign investment barely moved the needle.
• US PPI numbers came in above expectations, hampering rate cut bets.

The Canadian Dollar (CAD) broadly stuck to the middle ground on Friday, finding little room in either direction against the majority of its major currency peers heading into the week’s closing bell.

Canada saw a beat in December’s Foreign Portfolio Investment in Canadian Securities, but overall markets saw attention drawn away for the US Producer Price Index (PPI), which printed above expectations. CAD traders will be looking forward to Canadian Consumer Price Index (CPI) inflation figures due next Tuesday, and rate-cut seekers will be keeping an eye out for the Federal Reserve’s (Fed) latest Meeting Minutes will be dropping on markets next Wednesday.

Daily digest market movers: Quiet Friday sees the Canadian Dollar strung along the middle

• Foreign Portfolio Investment in Canadian Securities grew by $10.44 billion in December, well over the $-6.45 billion forecast. The previous month’s figure saw a minor revision to $11.31 billion from $11.43 billion.
• US Core annualized PPI grew by 2% in January, over the 1.6% forecast and above the previous period’s 1.7% (revised from 1.8%).
• The Michigan Consumer Sentiment Index rose for February, but less than expected, printing at 79.6 versus the forecast 80.0, up from January’s 79.0.
• The University of Michigan 5-year Consumer Inflation Expectations held steady at 2.9%.
• According to the CME’s FedWatch Tool, money markets see a 70% chance of no rate movement from the Fed in May, and June is now on the block as the first rate trim meeting.
• Next week’s Canadian CPI is forecast to tick down to 3.3% from 3.4% for the year ended January.
• MoM Canadian CPI in January is expected to rebound to 0.4% from December’s -0.3%.
• The Fed’s latest Meeting Minutes will be dropping next Wednesday, and investors will be diving into the Federal Open Market Committee’s latest discussions for hints about how close the Fed might be to pivoting into rate cuts.

Technical analysis: Canadian Dollar on the flat side on Friday as markets settle ahead of the Friday close

The Canadian Dollar (CAD) is stuck close to the midrange across the board on Friday, trading within a quarter of a percent against all of its major currency counterparts. The CAD rose about 0.15% against the Japanese Yen (JPY) and backslid about 0.20% against the Australian Dollar.

The USD/CAD continues to cycle the 200-hour Simple Moving Average (SMA) near 1.3490 as the pair gets hampered near the 1.3500 handle.

Rough chop on daily candlesticks leaves USD/CAD hamstrung on the 200-day SMA, and near-term swing lows continue to test back into recent consolidation. Despite halting progress, the pair is still up around 2.3% from December’s lows near 1.3175.

USD/CAD hourly chart

USD/CAD daily chart