The Canadian dollar strengthened after September inflation rose above the Bank of Canada’s target range, drawing attention to its Oct. 28 rate decision as the Australian dollar also advanced.
Statistics Canada said consumer prices rose 3.1% from a year earlier in September, compared with 3.0% in August. The reading exceeded the Bank of Canada’s 1% to 3% control range, whose midpoint is its 2% inflation target. Prices rose 0.1% from August.
Gasoline prices were 27.8% higher than a year earlier and drove much of the increase in the annual inflation rate, Statistics Canada said. Excluding gasoline, inflation eased to 2.2% from 2.4%. The agency said rising fuel oil prices affected households in Atlantic Canada more because the region relies more heavily on that fuel.
Reuters reported that the Canadian dollar gained 0.29% after the release, reaching C$1.4096 per U.S. dollar. FXStreet’s earlier snapshot put USD/CAD below C$1.4100 before Canada’s inflation release.
The Australian dollar also rose as traders assessed China’s economic figures. The National Bureau of Statistics of China (NBS) reported that the economy grew 4.5% from a year earlier in the third quarter, up from 4.3% in the second. For industrial enterprises above the designated size threshold, value added rose 5.5% from a year earlier in September. Retail sales of consumer goods increased 1.1%.
Investing.com reported that the Australian dollar gained 0.4% against the U.S. dollar in Asian trading. A later FXStreet snapshot, taken before Canada’s inflation release, put the pair near 0.6980, up about 0.5%.
Earlier Monday, the U.S. dollar index was little changed at 101.87 in an Investing.com snapshot taken at 2:32 a.m. ET (06:32 UTC). It had fallen 0.4% the previous week. Investing.com also placed the U.S. dollar near 158 yen in early trading.
The Bank of Canada’s Business Outlook Survey and Canadian Survey of Consumer Expectations are scheduled for 11:30 a.m. ET on Monday. The Federal Reserve meets Oct. 27-28, followed by the Bank of Canada’s rate announcement on Oct. 28.
