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Canada July CPI rises, lifting expectations for BoC inflation path

Headline CPI climbed to 3.0% year over year and the monthly rate increased 0.5%, while core measures stayed firm, with BoC set at 2.25%.

Reported · Written up by our desk · Major Pairs

Canada’s inflation accelerated in July, with headline CPI rising 3.0% year over year, up from 2.8% in June, and increasing 0.5% month over month, according to data previewed by FXStreet.

The Bank of Canada’s core CPI measure, which excludes more volatile food and energy, rose 2.3% over the past year and increased 0.2% versus the prior month. Other BoC inflation gauges also pointed to steadier price pressures, with Common CPI at 2.7%, Trimmed CPI at 1.9%, and Median CPI at 2.0%.

FXStreet noted that higher gasoline and travel tour prices contributed to the July headline acceleration, while faster price growth was partly offset by a deceleration in the food purchased from stores index. The all-items CPI excluding gasoline rose 2.2% for the third consecutive month.

On the currency side, FXStreet said the Canadian dollar built on recent gains and put pressure on USD/CAD, as spot revisited levels last seen in early June and looked toward the pair’s key 200-day SMA in the mid-1.3800s. Markets will also focus on the full July CPI release on Monday, after the BoC held its interest rate steady at 2.25% on July 15.

Latest closeGasoline (RBOB) $2.901 ▼7.3%

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