USD/CAD– Canada’s July Inflation Comes Softer than Expected

on Aug 23, 2013
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**iNVEZZ.com, Friday 23 August:**

Canada’s CPI for July showed a rise of 1.3 percent y/y, a slower rise that the 1.4 percent economists had expected, yet faster than June’s 1.2 percent increase. On a monthly basis, the consumer price inflation gauge showed an increase of 0.1 percent for July after unchanged prior reading. Analysts had predicted a rise of 0.2 percent.
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Year-on-year core consumer prices increased by 1.4 percent, marginally below the estimated 1.5 percent rise. However, inflation accelerated from June’s 1.3 percent. The Core CPI m/m stayed flat and lower of the median market forecast for growth of 0.1 percent, following the prior decline of 0.2 percent. Core consumer prices exclude autos and other volatile items, which account for a quarter of the total number, but tend to distort the underlying trend.

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The rise in Canadian CPI was led by transportation prices that rose 2.7 percent y/y following a 2.0 percent gain in the prior period. Petrol costs were 6.1 percent higher compared to July last year. Fuel prices rose 4.6 percent in June. Shelter prices advanced 1.3 percent, yet mortgage costs dropped by 3.8 percent.

Consumer prices increased in seven of the eight sectors monitored by Statistics Canada, with health and personal care the only exception. Health care prices dropped for the fourth consecutive month in July, year-on-year, after marking strong increases for more than a decade. According to the Canadian statistical office, the decline is ‘’mainly attributable to falling prices for prescribed medicines.’’

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Forex: Afternoon update: Eurozone’s manufacturing activity performs better in August USD/CAD – Canada’s Retail Sales short of expectations

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In the US, New Home Sales for July disappointed the market with a reading of 0.394 million, significantly short of June’s 0.455 million, revised down from 0.497, and market consensus for 0.490 million. The July reading was a six-month low and might have been prompted by rising borrowing costs.
Following the disappointing US housing market update, the USD/CAD has surrendered some of the gains from the 45-day high of 1.0569 it hit earlier in the day and the pair is currently changing hands around 1.0523, or 0.03 percent higher for the day.

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Forex: Afternoon update: Eurozone’s manufacturing activity performs better in August USD/CAD – Canada’s Retail Sales short of expectations

FOLLOW our top traders or BET against them.
http://nvz.bz/19zgUvS

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