 Canadian Dollar jumps following after data showing that Canadian inflation unexpectedly accelerated in May. More importantly, the resurgence in price pressures was largely driven by significant increase in services inflation. The data aligns with BoC Governor Tiff Macklem's cautious stance that the central bank should not ease monetary policy "too quickly." Given this context, the likelihood of a back-to-back rate cut in July seems minimal. Attention will now shift to whether the Bank of Canada has room to cut interest rates at its September meeting, assuming no drastic economic surprises in the interim. In broader currency markets, the Euro has turned broadly lower as its near term recovery momentum waned. The common currency remains overshadowed by uncertainties related to the French parliamentary elections, making a sustained bounce unlikely until the political situation clarifies. Australian and New Zealand Dollars, along with Swiss Franc, are among the weakest performers today too. In contrast, Dollar is showing strength, positioning as the second strongest currency after Canadian Dollar. Yen is also seeing some recovery, while British Pound is holding a middle ground... |
