- Canadian inflation is expected to increase in June.
- The general consumer price index is expected to rise 1.9% year -on -year.
- The Canadian dollar has begun a consolidation phase.
The Canada Statistics Office will publish the June Consumer Price Index (CPI) on Tuesday. This will attract market attention as it will provide the Bank of Canada (Boc) new information on how inflation is changing, which they use to establish interest rates.
Economists anticipate that general inflation will increase to 1.9% in June, above 1.7% in May. It is possible that inflation has increased less than the 0.6% increase observed in May.
The BOC will also publish its underlying inflation measurements, which exclude food and energy costs. In May, these main indicators were 2.5% higher than in the same month of the previous year.
Although there are indications that the pressure on prices is decreasing, analysts are still quite concerned about the possibility that US tariffs make internal inflation increase. It is anticipated that both markets and policy responsible will be cautious in the coming weeks, since inflation forecast is now less clear.
What can we expect from Canada’s inflation rate?
The Canada Bank maintained its reference rate at 2.75% in June, in line with the expectations of investors. Before thinking to any stimulus measure, the Central Bank wants to see how US tariffs affect the entire economy. Governor Tiff Macklem has expressed the possibility of additional reductions if commercial problems get worse.
It was observed that the upward surprise in the data of the UPC UPC Canadian of April was mainly attributed to categories that are not typically affected by tariffs, specifically domestic services. It was noted that a burst at the beginning of tariffs establishes a bad starting point for inflation trends later this year.
During the press conference, Governor Macklem commented on the challenges of interpreting the effects of tariffs on the official IPC data and emphasized the dependence on soft data and perceptions of companies that had already indicated an increase in costs.
When will the Canadian CPI data be published and how could they affect USD/CAD?
On Tuesday at 12:30 GMT, Canada will publish its June inflation figures. The markets are preparing for inflationary pressure to resume.
If inflation is higher than expected, you could confirm the idea that tariff price pressure is beginning to manifest. This situation could lead to the Bank of Canada to adopt a more cautious approach, which could strengthen the Canadian dollar (CAD) and increase the expectations of additional rate cuts, which would exert additional pressure on the Loonie.
That said, an unexpected increase in inflation is not always good news. A sudden increase in inflation could cause people to worry about the health of the Canadian economy and, curiously, this could also harm the currency. In summary, markets are paying careful attention, not only to the main figure, but also what it means for politics and growth in general.
Fxstreet’s senior analyst Pablo Piovano said that the Canadian dollar seems to have started a range of rank, motivating the USD/CAD to stay around the 1,3700 neighborhood in recent days.
Piovano says that the occasional return of the seller bias could cause the USD/CAD to return to its minimum of 2025 of 1,3538, established on June 16. After this level is broken, the following two levels could be the minimum of September 2024 of 1,3418 (September 25) and the minimum weekly of 1,3358, reached on January 31, 2024.
He says that if the bulls become more confident, they could push the rising price until their temporal barrier in the simple mobile average (SMA) of 55 days of 1,3725, then to the monthly ceiling of 1,3797 reached on June 23, and finally to the maximum of May 1,4015 established on May 13.
Looking at the general panorama, Piovano hopes that the bearish trend prevails below its important 200 -day SMA in 1,4039.
He adds: “In addition, Momentum indicators seem to be mixed: the relative force index (RSI) is just above the 50 -directional index, and the average directional index (ADX) is below 16, which means that the current trend is losing some of its strength.”
(This story was corrected on July 15 at 08:30 GMT to say that Canada will publish its June inflation data, not in April.)
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Economic indicator
Consumer Price Index (Yoy)
Statistics Canada It is the entity responsible for publishing the consumer price index, which is a measure of the movement of prices through the comparison between the prices of retail sales of a basket of representative goods and services. The purchasing power of the Canadian dollar is diminished by inflation. He Canada Bank Its objective is an inflation range (1% – 3%). A high reading would anticipate an increase in interest rates and is bullish for the Canadian dollar.
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Last publication:
Mar Jun 24, 2025 12:30
Frequency:
Monthly
Current:
1.7%
Dear:
1.7%
Previous:
1.7%
Fountain:
Statistics Canada
Why is it important for operators?
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
