Canadian consumer price index likely to have accelerated in September

The Canadian consumer price index is expected to have accelerated in September from August’s print. According to a TD Economics research report, the CPI index is likely to have risen to 1.7 percent year-on-year from August’s 1.4 percent year-on-year.

Energy prices are expected to have mainly driven the consumer price inflation on increased gasoline prices, whereas food prices are likely to have exerted downward pressures due to the rapid appreciation of the Canadian dollar. Apparel are also expected to have exerted downside pressure as it is sensitive to currency fluctuations, along with telephone services.

Meanwhile, shelter prices are likely to have strengthened from rises in new housing price index. The fundamental story continues to be sound with labor market slack dissipating and wage pressures rising, permitting core inflation measures to steady or strengthen further in this report. The Bank of Canada’s three measures averaged a 1.5 percent year-on-year rate in August.

“A move higher toward 2 percent would strengthen confidence that the output gap is approaching is closure, which we set estimate is by yearend”, added TD Economics.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bearish at -98.0005, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -8.06135. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest