Canadian Dollar Falls 0.3% on Cooling Inflation

Canadian Dollar Falls 0.3% on Cooling Inflation

The Canadian dollar slipped 0.3% on Monday, trading at C$1.4060 per U.S. dollar (equivalent to 71.12 U.S. cents), after retreating from its intraday high of C$1.4001 earlier in the session. The move followed the release of June inflation data showing the annual consumer price index declining to 2.8%, down from a 29‑month high of 3.2% recorded in May, a drop driven primarily by lower gasoline prices. Core inflation measures monitored by the Bank of Canada also fell, though specific figures were not disclosed.

In the interest‑rate swap market, the implied probability of a Bank of Canada policy rate increase by the end of December fell to 66%, down from 72% prior to the inflation release, indicating reduced market expectations for further tightening this year.

Oil, a major Canadian export, saw its price ease by 0.4% to US$82.16 per barrel, providing additional downward pressure on the loonie. Meanwhile, data from the U.S. Commodity Futures Trading Commission released on Friday indicated that non‑commercial (speculative) net short positions on the Canadian dollar rose to 176,279 contracts as of 14 July, up from 173,126 contracts the previous week, marking the highest bearish stance since January.

The article also noted that expectations of renewed U.S.–Iran negotiations were offset by the Yemen‑based Houthis announcing a naval blockade against Saudi Arabia, though this development did not directly affect the currency move.

This article was generated with the support of AI and reviewed by an editor.