Slide in the Canadian dollar impacting Canadian inflation in 2015

Of the many factors impacting the outlook for Canadian inflation in 2015, the slide in the Canadian dollar over the last two years has been notable, depreciating by 30% since late 2012.

The lower value of the Canadian dollar is estimated to have lifted Canadian consumer inflation by 0.6 percentage points in Jan 2015.

TD Economics notes in a report on Tuesday:

• The weaker Canadian dollar could contribute about 0.8 percentage point to inflation in 2015, accounting for 40% of the increase in consumer prices in the year. 
  
  
• The impact of the currency will be largest for items that are import-intensive.