The Canadian consumer price index rose in February, coming above consensus expectations. The headline inflation rose 1.5 percent year-on-year, as compared to the expectations of a stable price growth of 1.4 percent.
Food price growth accelerated to 3.2 percent year-on-year from January’s 2.8 percent. Clothing and footwear recorded a rise of 1.6 percent, accelerating from 0.5 percent. Energy prices continued to be in negative territory, but moved up from January’s -6.9 percent. Goods price inflation came into positive territory, rising 0.6 percent year-on-year, but service price growth decelerated to 2.3 percent from 2.7 percent in January.
Sequentially, prices rose 0.2 percent in February. Gains were comparatively widespread with only household operations dropping in the month. Core inflation measures came in mostly unchanged with both CPI-median and CPI-trim steady at 1.8 percent and 1.9 percent, respectively. The CPI-common measure dropped to 1.8 percent from 1.9 percent. Core inflation has now been modestly below 2 percent since August of last year.
“Its relative stability suggests little need for a change in policy in either direction. If anything, the slight move down in the CPI-common measure reinforces the view that the Bank of Canada is likely to remain on hold (perhaps) indefinitely”, said TD Economics in a research report.
At 13:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -145.065 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -16.1597 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
