On Thursday, the USD to CAD exchange rate rebounded amid the spike in Canada’s inflation data.
Accordingly, the currency pair elevated 0.20% to $1.23 per share, bouncing up from its three-month low yesterday.
On the economic data front, the Canadian core consumer price index (CPI) widened to 0.30% month-on-month from the August rate of 0.20%.
On a yearly basis, it increased to 3.70% from the previous figure of 3.50%, supporting the CAD currency.
Despite the rebound, the USD to CAD exchange rate might face a downside on a possible sooner-than-expected rate hike.
Correspondingly, economists explained that the said inflation is not transitory. Consequently, it could push the Bank of Canada to raise its benchmark rate in the second half of 2022.
Moreover, investors also looked forward to the release of the new housing price index today.
Meanwhile, the US dollar index, which trails the greenback against a basket of currencies, elevated to 0.11% to $93.66.
At the same time, it reversed its decline of 0.13% to $93.61 per share.
Subsequently, traders eyed the American jobless claims today. It is forecasted to increase to 300,000 from the prior number of 293,000.
Additionally, the dollar consolidated at lower levels in early trade as China Evergrande woes revived concerns on possible economic contagion.
Accordingly, the Chinese property giant terminated its deal to sell a $2.60 billion stake to Hopson Development Holdings.
Also, the cash-strapped developer nears a default as one of its dollar bonds expires on Friday.
Furthermore, the global energy crunch and the elevated inflationary pressures continue to weigh down market confidence.
As a result, this continuously strengthens the USD to CAD exchange rate.
Greenback Flat as USD to CAD Exchange Rate Hikes
Meanwhile, the greenback is flat against its other peers as the USD to CAD exchange rate hiked.
For instance, the Japanese yen plummeted 0.17% to $114.04, veering off its four-year peak of 114.70.
Consequently, the Australian dollar slumped 0.36% to $0.75 as the Swiss franc is unchanged to $0.92.
Similarly, the euro tumbled 0.05% to $1.16, staying close to its three-week peak of $1.17 last Tuesday.
Also, the Pound sterling diminished 0.19% to $1.38. This is after the recent inflation figures highlighted the vulnerability of the United Kingdom to higher interest rates.
Then, the Chinese yuan edged up 0.04% to $6.40. Its stable move came after the local government reassured the market that it could halt a possible systemic crisis.