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by ForexNewsNow Team on October 22, 2010

Canada Reports Rising Inflation for September

Intraday analysis - The Canadian FlagNEW YORK (Forex News Now) – In realtime forex news, Canada released its Consumer Price Index for the month of September, suggesting that inflation is on the rise across the board.

According to the report, annual inflation year on year rose from 1.7% in August to 1.9% in September, with seven of the eight major components in the CPI rising.  The eighth component – clothing and footwear – is down 2.2% on the year, but is up 3.0% month over month.

Energy was the prime driving force behind the increase as the index moved up to 5.6% on the year – even while dropping 0.4% monthly from August to September.

Retail sales, released in a separate report, also rose unexpectedly, increasing by 0.5% in August.  This report lags by two months, though, so market impact should be minimal.

The realtime forex news about inflation has largely failed to move the market significantly, mostly because the results were largely expected.  One key consideration ahead of the report’s release was whether or not the figures would justify an increase in the lending rate by the Bank of Canada.

According to most economists, the report – which revealed a core inflation rate drop from 1.6% to 1.5% – reveals a bit of weakness that will likely forestall any moves to alter the interest rate for the time being.

In response to both reports, the Canadian dollar rose 0.09% against the dollar, to 1.0252, and gained 0.02% on the euro, to 1.4281.

By ForexNewsNow Team

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