Canada’s CPI better than expected

By MoneyWay | Jul 22, 2020

The Consumer Price Index (CPI) rose 0.7% on a year-over-year basis in June, up from a 0.4% decline in May. Excluding gasoline, the CPI rose 1.2%.On a seasonally adjusted monthly basis, the CPI increased 1.0% in June. Excluding food and energy, the seasonally adjusted CPI rose 0.2%. The year over year increase was the fastest since March 2011. Prices rose in five of the eight major components on a year-over-year basis. Food and shelter prices contributed the most to the increase in the CPI. Prices for goods declined by less than the previous month on a year-over-year basis, including energy prices. Gas prices fell year over year but not as much as the months of March and April.

The Canadian dollar is doing better, however tensions between China and the United States have a turn for the worse. The U.S. has demanded that China close its consulate in Houston, Texas, as the U.S. has now accused China of hacking and stealing intellectual property particularly in regard to research on Covid-19 vaccines. Given this situation, equities could go back into negative territory and the Canadian dollar could weaken against the USD.

Currently             Close                     Range

USDCAD               1.3403                   1.3459                   1.3403-1.3483   

EURCAD               1.5533                   1.5514                   1.5498-1.5589

GBPCAD               1.7058                   1.7120                   1.7035-1.7142

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