Rising for the second straight day against the US dollar – and the third session of the last four – the Canadian dollar pushed ahead towards parity following an upbeat consumer prices report for the country.  According to Statistics Canada, consumer inflation rose by 3.2% in the month of September.  Although still well below the 3.7% May peak, the annualized figure beat out August’s 3.1% rise.  Additionally, core prices gained by 2.2%, against the previous month’s 1.9% jump.

This latest bit of inflationary data is helping to fuel Canadian dollar bidding ahead of the weekend as it is likely to calm growing speculation that the Bank of Canada will opt to cut interest rates before the year end.  Due to subpar growth prospects and the spectre of a systemic catastrophe on the heels of a European debt crisis, traders have been bearish the Loonie since the end of the summer.  The sentiment has helped the USDCAD currency pair to jump from a low of 94 in August to above parity.

But, now, with consumer inflation on the rise, it seems that policymakers will not have enough in the way of justifying a rate cut – likely leaving rates at the current 1% come their next monetary policy meeting October 25.

Speculation has supported a lower USDCAD currency rate, as the pair trades at 1.0071, down 0.8% on the session.