Canadian consumer price inflation likely to have eased in December

The Canadian consumer price inflation data for the month of December is set to be released tomorrow. According to a TD Economics research report, the headline inflation is expected to have eased to 1.9 percent year-on-year in December due to fall in gasoline prices.

Prices of food have scope for a sustained rebound aided by stabilization in the Canadian dollar. Moreover, vehicle prices could also hold strong on back of better price gains in the U.S. Exclusion based core indexes should pick up on balance but the Bank of Canada core metrics have restricted scope for an additional acceleration given the sharp improvement in prior months. Therefore, stabilization is expected in the latter.

“The apparel category is also exposed to a large drop. Overall, risks are skewed to the downside in our forecast”, added TD Economics.

At 21:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral 23.7347, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -102.493. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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