Forex News – Canadian dollar falls after inflation drops below BOC target
May 17, 2013 1:59 pm
The Canadian dollar weakened sharply against the US dollar after data showed that Canada’s annual inflation rate fell to 0.4 percent in April from the previous month’s 1.0 percent . This is the lowest since October 2009 and well below the Bank of Canada’s target range of 1 to 3 percent.
Core CPI on a monthly basis also fell to 0.1 percent disappointing expectations for it to remains at 0.2 percent.
Contributing to the decline was the fact that gasoline prices decreased 6 per cent on a year-over-year basis in April, after falling 0.3 per cent in March.
Doug Porter, Chief Economist at BMO Capital Markets said the following:
“The beat goes on with Canadian inflation. It just keeps grinding lower. One of the big stories is the relative softness in gasoline prices, they did take a fairly large tumble in April, but obviously there is more to the story with core inflation just scraping along at the very low end of the Bank of Canada’s comfort range at 1.1 percent. So while energy and specifically gasoline are a big part of the story of tame inflation, there really isn’t much going on anywhere else in the Canadian consumer basket.”
The Canadian dollar weakened sharply against the US dollar after data showed that Canada’s annual inflation rate fell to 0.4 percent in April from the previous month’s 1.0 percent . This is the lowest since October 2009 and well below the Bank of Canada’s target range of 1 to 3 percent.
Core CPI on a monthly basis also fell to 0.1 percent disappointing expectations for it to remains at 0.2 percent.
Contributing to the decline was the fact that gasoline prices decreased 6 per cent on a year-over-year basis in April, after falling 0.3 per cent in March.
Doug Porter, Chief Economist at BMO Capital Markets said the following:
“The beat goes on with Canadian inflation. It just keeps grinding lower. One of the big stories is the relative softness in gasoline prices, they did take a fairly large tumble in April, but obviously there is more to the story with core inflation just scraping along at the very low end of the Bank of Canada’s comfort range at 1.1 percent. So while energy and specifically gasoline are a big part of the story of tame inflation, there really isn’t much going on anywhere else in the Canadian consumer basket.”
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