Canada’s headline inflation likely to have decelerated further in June, says TD Economics

Canada’s headline consumer price inflation is expected to have slowed further in June. According to a TD Economics research report, Canadian consumer price index is likely to have dropped further to 1.1 percent year-on-year from May’s 1.3 percent year-on-year, reflecting unchanged prices on the month.

The rise from energy prices on a year-on-year basis is likely to turn to a drag, led by lower gasoline prices, while food price deflation should dissipate in line with increasing agricultural prices. Continued strength in shelter costs are likely as presaged by the ongoing acceleration in the new housing price index, while declining vehicle prices continue to be a downside risk.

“We look for more signs of stabilization in the core metrics of inflation (CPI common, trimmed mean and median), which averaged a cycle low of 1.3 percent y/y in May. However, a continued downward pull from lagged effects of slack cannot be ruled out”, added TD Economics.

At 23:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 39.9589, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -94.3269. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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