Nick Rees, senior FX market analyst at Monex Europe Ltd., noted, “Despite a modest undershoot for the unrounded headline figures, today’s US CPI data was still solid across the details.”
Rees added that this data has redirected market focus to the increasing economic divergence between the US and Canada.
The Bank of Canada projects the Canadian economy to grow by 1.2 percent this year, compared to 2.8 percent in the United States.
US President-elect Donald Trump is expected to either maintain or introduce new tax cuts and reduce business regulations, potentially adding to American growth.
The Canadian dollar traded 0.3 percent lower at 1.3985 to the US dollar, or 71.51 US cents, after reaching its weakest intraday level since May 2020 at 1.3999.
