Canadian Dollar extends rebound on upshot CPI print

The Canadian Dollar gained another 0.3% on Tuesday.

Canada saw a higher-than-expected CPI inflation print for October.

A reacceleration of inflation is sparking hopes for further BoC rate cuts.

The Canadian Dollar (CAD) caught a bid on Tuesday, rising for a second straight day against the Greenback after Canadian Consumer Price Index (CPI) inflation rose again in October. The CAD is burning rubber against the US Dollar, recovering a full percentage point with further gains in the scope as the Loonie claws back ground after hitting 54-month lows near 1.4100.

Canada’s entire basket of CPI inflation figures swept forecasts on Tuesday, printing higher across the board and set to test the Bank of Canada’s (BoC) resolve on interest rates. The figures are still on the low side of recent history; headline annualized CPI hit a three-year low just last month. However the rebound in figures will still serve as a shot across the bow of the BoC, which is already on a path of accelerating rate cuts as the Canadian economy waffles in the post-pandemic environment.