Forex
Home›Forex›Central Banks›Canadian CPI outlook reinforces expectations for an ex…
Canadian CPI outlook reinforces expectations for an extended Bank of Canada pause
Brown Brothers Harriman expects core CPI to remain below 2%, while looming 50% tariffs on about USD 20 billion of Canadian imports could add further pressure on the Canadian dollar.
Brown Brothers Harriman’s Elias Haddad expects Canada’s July CPI to keep core inflation under the Bank of Canada’s 2% target, supporting an extended pause in policy tightening, FXStreet reports.
BBH projects headline CPI at 2.9% year over year versus 2.8% in June, with core CPI (excluding food and energy) at 1.8% year over year, unchanged from June. It also forecasts core measures, including the trim and median, at 1.85% for a second straight month.
Haddad also points to trade risks, flagging that US tariffs of 50% on nearly USD 20 billion of Canadian imports are expected to take effect unless US-Canada talks produce a breakthrough. In BBH’s view, anchored core inflation and trade friction create room for Bank of Canada rate-hike expectations to be repriced lower, which could weigh on the CAD.