Following Wednesday’s release of Canadian inflation report which shows a slower growth rate of 1.9 percent, Shaun Osborne, chief foreign exchange strategist at Scotiabank said this means the Bank of Canada can bide its time in easing rates.
According to Osborne, there are many uncertainties, including trade and Saudi Arabia, “so inflation, especially core, holding around 2% suggests no pressure for the Bank of Canada to ease.’’
The country’s statistics office had reported a general fall in prices for August 2019 as citizens paid lower for gasoline and vegetable.
It said, annual consumer price inflation slowed to 1.9 percent last month from 2 percent in July. The number matched analyst expectations.
Canada’s CPI has grown at 1.9 percent or more on an annual basis for six consecutive months. The gains have coincided with robust labor market conditions.
Core inflation, seen as a better gauge of underlying price pressure, met the Bank of Canada’s target.
The average of the three measures was 2 percent. Economists had forecast an average rate of 2.03 percent, which would have been unchanged from July.
Canada’s currency according to expert reports, erased declines after the release, and was trading little changed at C$1.3254 against its U.S. counterpart at 8:36 a.m. in Toronto. Yields on 2-year government bonds fell 1 basis point to 1.61%.