The week had started on a relatively calm note in currency markets as markets had been bracing for the US CPI release that came out this morning.

Last week finished on a broadly positive note as Non-Farm Payrolls beat, which gave some relief to a US Dollar that was selling heavily throughout the past week, with the DXY marking lows at 98.35 before consolidating higher.

However, this morning’s miss on the inflation data, particularly on the Fed’s favorite Core CPI month-over-month (0.1% vs 0.3%) sent the Dollar Index lower, and it is currently retesting last week’s lows.

The Canadian Dollar , on the other hand, has been holding and is broadly unchanged on the week against other currencies – more on this further in the article.

North American Equity Indices Snapshot

This morning marked new all-time highs for the Canadian stock Index TSX up 0.45% on the session and trading above the 26,500 mark.

US Stock indices had been enjoying the US CPI report initially, with the Nasdaq breaking the 22,000 milestone for the first time since February 21st but has since reversed back below.

All other US indices are now in the red for the day in what appears to be sell-the-news flows – they are still up slightly on the week.

US Dollar Mid-Week Performance Vs Majors

The US Dollar had been holding strong against its major counterparts before this morning’s miss in the US data pushed it lower.

It is down against all currencies by virtually the same amount (~ -0.23%) except for the Euro which is up 0.80% against the Greenback

Dollar Index 4H Chart

Observe the reactions to numbers on the charts. The Dollar Index is currently in the 99.00 key pivot zone around the monthly lows.

A reversal of this morning’s action would point towards the Higher Timeframe 100.00 Resistance Zone, although this morning’s data does not support this scenario as much.

A break from here would point to potential Support Zones:

• Support 1: 97.92 (April 2025 lows)
• Support 2: 97.50 Zone (+/- 0.15)
• Support 3: 96.70 Zone

Canadian Dollar Mid-Week Performance vs Majors

The Loonie is broadly up from a small margin against all majors except for the Euro, which has been particularly strong this week, and to no surprise leads the most against the US Dollar.

Intraday Technical Levels for the USD/CAD

USD/CAD is still hanging around the 1.3675 to 1.3686 Pivot Zone, although after this morning’s action, it seems that prices are trying to break down slowly.

The pair is progressing in the Daily Descending Channel, and this effect is boosted by the 4H 50-period Moving Average acting as immediate resistance.

US and Canada Economic Calendar for the Rest of the Week

The calendar is thin for Canadian releases; however, it’s not exactly the same for the United States.

Tomorrow’s biggest data is the Producer Price Index (PPI), where market players will know, once again, more about the effect of imposed tariffs.

The headline PPI is expected at 0.2 m/m (2.6 y/y) and the more market-moving core PPI data is expected higher (+3.1% y/y and + 0.3% m/m ) – Let’s see if the miss in US Consumer products is also reflected in producer prices – any positive surprise will surely be welcomed by markets.

Another key piece of data (not highlighted as important) will be the 30Y bond auction tomorrow, where we will see if key players have appetite for safe-haven assets following today’s action in US Equities.

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