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Canadian consumer price inflation likely to have accelerated in November

Canadian consumer price inflation is expected to have accelerated in November. According to a TD Economics research report, the headline inflation is likely to have risen to 1.9 percent year-on-year from 1.4 percent, driven by a sharp rise in gasoline prices. The sharp pickup would be short-lived as base effects are adverse over the months ahead and gasoline prices are set for a partial reversal in December.

This will lead the headline inflation back down to 1.7 percent year-on-year in December before bottoming out at 1.4 percent year-on-year in January, stated TD Economics. However, excluding energy, the inflation picture should be constructive in November. Following a series of decline, prices of food might rebound with the help of a weaker Canadian dollar, which returned to its pre-July hike levels in November.

Stripping food and energy, consumer prices are expected to have accelerated to 1.6 percent year-on-year, the highest since March. The rapid absorption in labor market slack, which is more apparent in wage growth, also indicates towards stable to higher readings in the three new core metrics, added TD Economics.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -104.301, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -29.8696. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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