- Statistics Canada reveals a 2.4% growth in Canada’s annual inflation.
- CPI common reveals at 1.8% in January versus 2.0% estimated.
- USD/CAD dropped from 1.3252 to 1.3220 on Wednesday.
Statistics Canada announced the monthly consumer price index (CPI) report for January on Wednesday. The data highlighted a 2.4% growth in Canada’s annual inflation last month. Much of the gain, according to the analysts, was attributed to higher prices for gasoline. Giving an optimistic view of the economy, experts anticipate Wednesday’s data to fuel the debate on the strength of the Canadian economy and whether or not the Bank of Canada should opt for a rate cut in its next monetary policy meeting.
In a previously announced estimate, analysts had expected Canada to see a 2.3% growth in its monthly consumer price index in January. In December, the figure was capped at an even lower 2.2%. Excluding volatile components like gasoline prices, annual inflation recorded a 2.0% surge last month.
Common CPI Reveals At 1.8% In January Versus 2.0% Estimate
According to the Bank of Canada, CPI common is the most reliable measure to get an insight into the economy’s underperformance. Canadian CPI common was revealed at 1.8% in January that cam shy of the 2.0% estimate from economists. In December, CPI common was printed at 2.0%.
CPI median, as the name depicts, covers multiple components of the consumer price index and reports their median inflation rate. Canada’s median CPI was noted at 2.2% in January that came in line with the analysts’ estimates. The figure was also branded to have remained unchanged from December.
Lastly, CPI trim that doesn’t cover outliers (both upside and downside) printed at 2.1% last month ass compared to 2.0% in December, as per the revised figures. Analysts were expecting Canada’s CPI trim to post at 2.2% in January.
Global Oil Prices Dropped Following Coronavirus Outbreak In China
Statscan attributed the increase in the monthly CPI to 11.2% (year over year) gain in gasoline prices that stemmed from the rising geopolitical tensions between the U.S and Iran. Global oil prices, however, were reported under pressure towards the end of January due to the outbreak of Coronavirus in China. The health emergency made it tougher to give an accurate estimate of how strongly is the virus crisis going to impact the global oil market.
Wednesday’s data also highlighted a 5.0% increase (year over year) in fresh vegetable prices in Canada as compared to last year. Much of the gain in this sector was ascribed to the higher prices of tomato that noted a 10.8% gain.
The forex market responded moderately to the economic data on Wednesday. USD/CAD (Loonie) dropped from a daily high of 1.3252 on Wednesday to a low of 1.3220.