CPI (MoM) Canada
Softening Inflation in Canada
Starts Tuesday, August 21, 2018 at 17:41
Updated Friday, August 17, 2018
Consumer price index inflation used to be pretty upbeat during winter in Canada but it started softening in spring and it remains at 0.1% at the moment. It is expected to remain unchanged again this month. But if we see a negative number then I expect USD/CAD to accelerate the bearish rally. Last week we saw some decent employment numbers from Canada so don't be surprised if we see a positive number today as well, but I don't think that it will reverse the major trend for USD/CAD.
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About CPI (MoM) Canada
Canadian CPI (MoM) is a primary measurement of inflationary pressures facing the CAD. It is derived and presented by the National Statistics Bureau, a governmental entity. Canadian CPI (MoM) is a comparison of retail prices facing a typical basket of goods and services, compared on a month-over-month basis. Monetary policy decisions, trade balance, and consumer confidence are sensitive to CPI. Currency markets involving the CAD are receptive to a growing CPI, as it is a signal of inflation. As inflationary pressures grow or reside, the Bank of Canada (BOC) crafts monetary policy accordingly. High CPI values are often viewed as a precursor for tightening monetary policy toward the CAD, while low readings are conducive to a dovish tone.Canadian CPI is capable of swaying CAD valuations dramatically. Strong values lead to bullish participation for the CAD and lagging CPI facilitates bearish price action.