The AUD/CAD currency pair scaled a fresh seven-week peak on Wednesday on the back of a surprisingly strong Australian CPI inflation print and ahead of a policy decision by the Bank of Canada later in the day.
Australia’s consumer prices surged 1.2% quarter-on-quarter in Q3, picking up from a 0.8% gain in the second quarter and exceeding market consensus of a 1.1% increase.
The data added to prospects of a potential interest rate hike by the Reserve Bank of Australia in November after four rate pauses.
“The RBA’s November meeting is likely to be live, and the cash rate to be hiked to 4.35%. And I suspect it will be a hawkish hike,” Matt Simpson, senior market analyst at City Index, was quoted as saying by Reuters.
Meanwhile, the Bank of Canada is largely expected to leave the target for its overnight rate without change at 5% at its October policy meeting.
Having last hiked in July, the BoC left borrowing costs on hold in September on evidence of a marked slowdown in Canada’s economy. Output unexpectedly shrank at an annualized rate of 0.2% in the second quarter, as household credit growth decelerated and affected aggregate demand.
As of 9:01 GMT on Wednesday AUD/CAD was edging up 0.14% to trade at 0.8743. Earlier in the session, the minor Forex pair went up as high as 0.8788. The latter has been the pair’s strongest level since September 4th (0.8798).
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