Toronto, Jan 20, 2026, 12:17 EST<\/p>\n
Canada\u2019s dollar hit a six-day peak Monday, gaining 0.4% to trade at C$1.3865 per U.S. dollar. The greenback weakened following President Donald Trump\u2019s fresh tariff threats targeting Europe over Greenland. Oil prices nudged up 0.2% to $59.57 a barrel. Canadian bond yields were mixed: the two-year yield slipped 1.1 basis points to 2.538%. \u201cI think the headline is what matters right now,\u201d said Adam Button, chief currency analyst at investingLive. (Reuters<\/a>)<\/p>\n Canada\u2019s December inflation came in at 2.4% year-over-year, edging past the 2.2% forecast, even as prices slipped 0.2% month-over-month. The Bank of Canada\u2019s core inflation gauges cooled for a third month running, with CPI-median easing to 2.5% and CPI-trim down to 2.7%. These measures, designed to smooth out erratic price moves, suggest the central bank can hold steady on rates. \u201cToday\u2019s data are still consistent with underlying inflation being close to 2%,\u201d noted CIBC Capital Markets economist Andrew Grantham. Fitch Ratings\u2019 Jessica Hinds added it\u2019s \u201chighly unlikely to change the calculus\u201d for the BoC. (Reuters<\/a>)<\/p>\n Statistics Canada highlighted items like restaurant food and certain children\u2019s products, which benefited from a GST\/HST exemption the previous year, as factors behind the faster year-over-year increase. The agency also announced it will revise its CPI-median and CPI-trim revision policy beginning with the January CPI report due Feb. 16. (Statistics Canada<\/a>)<\/p>\n Trump\u2019s tariff threats moved front and center. He warned of a 10% tariff starting Feb. 1 on imports from eight European nations, tied to whether the U.S. can purchase Greenland. That rate could jump to 25% by June 1, Reuters reported. Greg Taylor, chief investment officer at Purpose Investments, noted uncertainty among investors about whether Canada might get \u201cdragged into this and get painted with the same brush as Europe.\u201d (Reuters<\/a>)<\/p>\n The dollar continued sliding Tuesday, on track for its largest daily fall in more than a month, boosting the euro, sterling, and Swiss franc. Tony Sycamore, market analyst at IG, pointed to \u201cfears of prolonged uncertainty\u201d as investors reignited the \u201cSell America\u201d trade, where U.S. stocks, bonds, and the dollar drop in unison. (Reuters<\/a>)<\/p>\n However, the loonie\u2019s direction might depend as much on politics as on market factors. On Tuesday, the U.S. Supreme Court handed down three rulings but held off on a high-profile case challenging the legality of Trump\u2019s global tariffs. It also gave no timeline for when it will revisit the issue. (Reuters<\/a>)<\/p>\n Monex noted that the Canadian dollar saw just a mild lift from the CPI surprise, with bigger factors like oil prices, risk appetite, and U.S. developments still steering USD\/CAD. In a morning report featured on Investing.com, Monex pointed out the pair dropped below 1.39 after the inflation figures and kept drifting downward. (Investing.com Canada<\/a>)<\/p>\n Robert Roach, economist at ATB Financial, attributed the spike in the headline rate to a base effect from last year\u2019s GST\/HST holiday, not new economic pressures. He wrote that December\u2019s inflation data \u201creinforces our call that the Bank of Canada will hold at its 2.25% policy rate through 2026,\u201d despite grocery prices rising 5% year-over-year. (ATB Financial<\/a>)<\/p>\n Traders face a tricky combo: easing core inflation suggests Ottawa should hold steady, while ongoing tariff tensions continue to prop up the U.S. dollar. The Canadian dollar usually acts like a risk asset\u2014until the greenback falters for unrelated reasons\u2014and this week, that dynamic is definitely in play.<\/p>\n","protected":false},"excerpt":{"rendered":"Toronto, Jan 20, 2026, 12:17 EST Canada\u2019s dollar hit a six-day peak Monday, gaining 0.4% to trade at…\n","protected":false},"author":2,"featured_media":242952,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-242951","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/242951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=242951"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/242951\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/242952"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=242951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=242951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=242951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}