Canadian Dollar falls after inflation data shows further cooling in June

Source Fxstreet
  • The Canadian Dollar declines after the release of lower-than-forecast inflation in June. 
  • The data indicates a greater probability the Bank of Canada will lower interest rates again in July. 
  • The US Dollar strengthens meanwhile, after US Retail Sales data, pushing USD/CAD higher within its range. 

USD/CAD is trading higher, and has broken above 1.3700, after the release of Canadian Consumer Price Index (CPI) data for June showed an easing of inflationary conditions in Canada. The data further raises the prospect of the Bank of Canada (BoC) cutting its key interest rate again at its July 24 policy meeting, after already cutting its policy rate by 0.25% to 4.75% in June. 

Lower interest rates generally depreciate a currency as they reduce foreign capital inflows. The Canadian Dollar (CAD) is weakening against the US Dollar (USD) after the release – as USD itself pumps higher in most pairs following the release of US Retail Sales data at the same time as Canadian CPI was published.

Canadian Dollar falls after Canadian Inflation cools in June    

The Canadian Dollar is weakening after the Canadian Consumer Price Index (CPI) in June showed a decline of 0.1% month-over-month compared to the previous month’s 0.6% gain and missing expectations of 0.1%, data from Statistics Canada shows on Tuesday. 

On a yearly basis CPI rose 2.7% in June compared to 2.9% previously. 

Core CPI rose by 0.1% compared to 0.3% previously. 

The Bank of Canada’s Core CPI rose by 1.9% YoY in June from 1.8% previously, and on a monthly basis fell by 0.1% MoM compared to the 0.6% rise in May. 

USD strengthens after US Retail Sales release 

The US Dollar strengthens against the Canadian Dollar on Tuesday after Retail Sales data for June comes out – either in line with or – above economists’ expectations. The data suggests the US economy remains resilient which, in turn, supports the Greenback. 

US Retail Sales rose by 0.0% in June as expected and below May’s upwardly revised 0.3%,  according to data from the US Census Bureau on Tuesday. 

The Retail Sales ex Autos rose 0.4% in June when a 0.1% increase had been estimated from a revised-up 0.1% previously.  

The Retail Sales Control Group showed an increase of 0.9% from 0.4% in May. The Control Group is adjusted for seasonal variations and trading day differences and is seen as a more accurate measure of sales. 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Strong profits, falling shares: bank earnings day one meets a memory-chip rout — with CPI and ASML aheadGoldman Sachs blew past estimates (EPS $17.01 vs $13.09 expected, profit +33%) while JPMorgan missed ($5.75 vs $5.93) and Wells Fargo fell 3% — yet the S&P 500 finished flat at 7,805.45, pinned below its record close as a memory-chip rout (SOX −2.67%, Micron under $1,000) kept the pressure on. Tonight brings the week's decider: US September CPI at 8:30 ET, then Bank of America, Morgan Stanley, BlackRock and ASML before the open. Here are the levels, both cases, and the watch list.
Author  Irene Q.
Oct 14, Wed
Goldman Sachs blew past estimates (EPS $17.01 vs $13.09 expected, profit +33%) while JPMorgan missed ($5.75 vs $5.93) and Wells Fargo fell 3% — yet the S&P 500 finished flat at 7,805.45, pinned below its record close as a memory-chip rout (SOX −2.67%, Micron under $1,000) kept the pressure on. Tonight brings the week's decider: US September CPI at 8:30 ET, then Bank of America, Morgan Stanley, BlackRock and ASML before the open. Here are the levels, both cases, and the watch list.
placeholder
US September CPI recap: inflation hits 3.7% as core runs hot — is an October Fed hike back on the table?September CPI landed hot: headline 3.7% y/y, core 2.6% y/y and 0.3% m/m. October hike odds jumped from ~22% to ~37% — yet the dollar faded to 101.74, gold closed higher and the S&P 500 fell 1.11%. Here is the full repricing, the levels and what to watch next.
Author  Irene Q.
22 hours ago
September CPI landed hot: headline 3.7% y/y, core 2.6% y/y and 0.3% m/m. October hike odds jumped from ~22% to ~37% — yet the dollar faded to 101.74, gold closed higher and the S&P 500 fell 1.11%. Here is the full repricing, the levels and what to watch next.
placeholder
Gold defends $4,100 as BofA targets a break below $4,000 — why the Middle East bid is missingSpot gold flushed to $4,099.89, a whisker above October's $4,090 low, then rebounded to close at $4,138.25 (+0.82%) — even as US CPI ran hot. Bank of America sees gold below $4,000 within three months, citing shrinking demand and official-sector selling. Here are the levels, the drivers and what would flip the script.
Author  Irene Q.
20 hours ago
Spot gold flushed to $4,099.89, a whisker above October's $4,090 low, then rebounded to close at $4,138.25 (+0.82%) — even as US CPI ran hot. Bank of America sees gold below $4,000 within three months, citing shrinking demand and official-sector selling. Here are the levels, the drivers and what would flip the script.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 15, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 15, 2026. Read on for the details.
Author  Mitrade
20 hours ago
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 15, 2026. Read on for the details.
Related Instrument
goTop
quote