MARKETS TREND
The market trend factors in multiple indicators, including Simple Moving Average, Exponential Moving Average, Pivot Point, Bollinger Bands, Relative Strength Index, and Stochastic.
Today USD/CAD has jumped 50 pips higher off the 100 daily SMA, after a jump in Canadian February CPI inflation data.
All of Canada’s inflation measures ticked higher in February
Tariff Uncertainty and Market Volatility Drive USD/CAD Movements
The USD/CAD pair surged to a record high of 1.4792 after Donald Trump formally signed a 25% tariff on imports from Canada and Mexico into law. However, as trade negotiations progressed, some tariff measures were rolled back, causing USD/CAD to retreat to 1.4150 as traders speculated on further tariff reductions or eliminations.
USD/CAD Chart Daily – The 100 SMA Continues to Hold
Despite ongoing uncertainty, the 100-day simple moving average (SMA) has acted as strong support, with multiple rebounds off this key technical level. Today’s higher-than-expected Canadian CPI inflation data triggered another bounce, reinforcing the importance of this support zone for the pair’s price action.
Canadian Inflation Picks Up in February, Raising BoC Policy Questions
Inflation in Canada came in hotter than expected, raising concerns about whether the Bank of Canada (BoC) will reconsider its rate-cut path. Despite recent monetary easing, the sharp monthly and core inflation increases suggest that price pressures remain stubbornly high, potentially forcing the BoC to slow or pause further rate cuts.
Canada Inflation CPI Report for February 2025
Headline Inflation Rises More Than Expected
Canada’s Consumer Price Index (CPI) rose 2.6% year-over-year, surpassing the 2.2% forecast and up from 1.9% in January.
Monthly CPI climbed 1.1%, significantly higher than the 0.6% expected and a sharp increase from 0.1% the previous month.
Core Inflation Shows Persistent Price Pressures
Core CPI (m/m) rose 0.7%, compared to 0.4% in January, indicating underlying inflation remains sticky.
Core CPI (y/y) accelerated to 2.7%, up from 2.1% last month, suggesting broad-based price increases across key categories.
Key Inflation Metrics Signal Persistent Upward Pressure
CPI Median remained at 2.9%, matching expectations but revised up from a previous 2.4% reading last month.
CPI Trim also held steady at 2.9%, above the 2.6% expected, reinforcing signs that inflation may not be cooling as quickly as policymakers had hoped.
CPI Common remained unchanged at 2.5%, suggesting some stability in underlying inflation trends but still within a range that may keep the Bank of Canada cautious
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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