Canadian Dollar Recovers Against US Peer Despite Weak CPI Data

The  Canadian dollar today rallied against the  US dollar despite the  release of  weak Canadian inflation data in  the  early American session. The  USD/CAD currency pair started reversing its earlier gains and  extended its losses on the back of negative investor sentiment towards the  US dollar.
The  USD/CAD currency pair today dropped from a  high of  1.3483 in  the  early European session to  hit a  low of  1.3415 in  the  American session.
The  currency pair was in  a  consolidative phase during the  Asian session before rallying higher in  the  early European session. However, the  rally was not sustained as  a  slight rebound in  global oil prices as  tracked by  the  West Texas Intermediate, which hit a  high 48.00 earlier today, also boosted the  loonie triggering the  reversal. The  release of  the  Canadian CPI data for  November by  Statistics Canada triggered a  brief rally by  the  pair before it headed lower. The  headline CPI data came in  at  an  annualized 1.7% missing expectations by  0.1%, while the  core CPI print was in-line with expectations by  coming in  at  1.9%.
The  pair’s decline was not due to  the  loonie being much stronger than the  greenback, but rather was caused by negative investor sentiment towards the  US dollar ahead of  the  Fed interest rate decision.
The  pair’s short-term performance is likely to  be greatly influenced by  the  FOMC monetary policy decision and its policy statement scheduled for 18:30 GMT.
The  USD/CAD currency pair was trading at  1.3422 as  at  16:26 GMT having dropped from a  high of  1.3483. The  CAD/JPY currency pair was trading at  83.58 having rallied from a  low of  83.33.

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