Morning Commentary & Currency Insights – February 14, 2018

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The only thing the market will be caring about today is U.S. CPI data due to be released at 8:30 AM EST.  Expectations are for a rise of 0.3% on the month and 1.9% year over year.  Rumblings on the street is we will see 0.5% which would see the U.S. dollar surge higher against most currencies except Yen as participants currently view it as a safe haven in the current turmoil.  The current expectations of 3 FOMC hikes in 2018 would likely move to 4 hikes which would then put the FED “behind the curve” meaning market expectations are ahead of actual rate moves.

The Canadian dollar would be particularly hard hit on a strong U.S. inflation number as the BoC is viewed as being on hold for future rate hikes which is why we shot up to nearly 1.2700 in the past few weeks.  CAD is also being punished on the crosses with JPY, GBP AUD & EUR all pushing higher towards significant levels in the past few weeks.

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