Canada August CPI 7.0% y/y vs 7.3% expected

  • Previously it was 7.6%
  • CPI m/m -0.3% vs -0.1% expected
  • Prior m/m value was +0.1%
  • Excluding petrol +6.3% y/y vs +6.6% previously
  • Gasoline prices -9.6% vs -9.2% in July
  • Average hourly wage +5.4%
  • Energy prices +% vs +28.0% y/y before
  • Food +10.8% vs +7.6% y/y previously
  • Reception costs +6.6% vs +7.0% y/y previously
  • Services +5.5% y/y vs +5.7% previously
  • Full report

Core measures:

  • BOC core 5.8% vs 6.1% previously
  • BOC core m/m 0.0% vs +0.5% earlier
  • Median 4.8% vs 5.0% previously
  • Trim 5.2% vs 5.4% Earlier
  • Often 5.7% versus 5.6% expected (5.5% earlier)

This is an early sign of cooling down inflation

Inflation

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country rises over a period of time. It is the rise in the general price level where a particular currency actually buys less than in previous periods. In terms of judging the strength of currencies, and by extension currencies, inflation or measures thereof are extremely influential. Inflation arises from overall money creation. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean inflation. What leads to inflation is a faster increase in the money supply relative to the wealth produced (as measured by GDP). As such, this generates a demand pressure on a supply that is not increasing at the same rate. The consumer price index then increases, causing inflation. How Does Inflation Affect Forex? The level of inflation has a direct impact on the exchange rate between two currencies at different levels. This includes purchasing power parity, which tries the different purchasing power of each country according to the general price level. This makes it possible to determine the country with the highest cost of living. The currency with the higher inflation therefore loses value and depreciates, while the currency with the lower inflation appreciates in the forex market. also affected. Excessively high inflation rates push up interest rates, causing the currency to depreciate on foreign exchange. Conversely, too low inflation (or deflation) pushes interest rates down, causing the currency to rise in the forex market.

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country rises over a period of time. It is the rise in the general price level where a particular currency actually buys less than in previous periods. In terms of judging the strength of currencies, and by extension currencies, inflation or measures thereof are extremely influential. Inflation arises from overall money creation. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean inflation. What leads to inflation is a faster increase in the money supply relative to the wealth produced (as measured by GDP). As such, this generates a demand pressure on a supply that is not increasing at the same rate. The consumer price index then increases, causing inflation. How Does Inflation Affect Forex? The level of inflation has a direct impact on the exchange rate between two currencies at different levels. This includes purchasing power parity, which tries the different purchasing power of each country according to the general price level. This makes it possible to determine the country with the highest cost of living. The currency with the higher inflation therefore loses value and depreciates, while the currency with the lower inflation appreciates in the forex market. also affected. Excessively high inflation rates push up interest rates, causing the currency to depreciate on foreign exchange. Conversely, too low inflation (or deflation) pushes interest rates down, causing the currency to rise in the forex market.
Read this term of the first central bank to resign. The inside of the report appears consistent with the headline, although the overall rise in the CPI is noteworthy. On balance, there was negative inflation in August and the core remained stable. However, food is a major problem in Canada and worldwide, especially in places where people can no longer afford to pay.

The Bank of Canada is widely expected to raise 50 bps on October 26 to raise interest rates to 3.75%. From there we could see that the central bank may have indicated another 25 bps and then some time on the sidelines.

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