Canada Consumer Price Index (CPI) Set to Release Today: What to Expect

The publication of Canada’s January Consumer Price Index (CPI) figures on Tuesday would be the focus of consideration. Indeed, Statistics Canada knowledge will present the Bank of Canada (BoC) with a much-needed replace on worth pressures forward of its March 18 assembly, the place policymakers are extensively anticipated to preserve charges regular at 2.25%.

Economists see the headline CPI rising by 2.4% in a yr to January, nonetheless above the BoC’s goal and matching December’s enhance. On a month-to-month foundation, costs are anticipated to rise by 0.1%. The financial institution may also intently monitor its core measure (which strips meals and vitality prices), which held regular at 2.8% YoY within the final month of 2025.

Analysts stay uneasy after final month’s inflation pickup, and the danger of US tariffs feeding into home costs is including one other layer of uncertainty.

What Can We Expect From Canada’s Inflation Rate?

At its newest assembly, the central financial institution made it clear that coverage is broadly the place it wants to be to keep inflation close to the two% goal, assuming the economic system evolves as anticipated. That stated, officers had been equally eager to stress that they don’t seem to be on autopilot. If the outlook weakens or inflation dangers resurface, they stand prepared to regulate.

Indeed, on inflation, the tone was cautiously reassuring. Headline inflation is anticipated to hover close to goal, with spare capability within the economic system serving to to offset a few of the price pressures linked to commerce reconfiguration. Still, underlying inflation stays considerably elevated, a reminder that the disinflation course of shouldn’t be but totally full.

Inflation, due to this fact, stays the important thing variable to watch. A look on the newest figures confirmed that the headline CPI edged up to 2.4% YoY in December, whereas core inflation eased to 2.8% YoY.

Additionally, the financial institution’s most well-liked gauges, CPI-Common, Trimmed Mean, and Median, additionally moderated, however at 2.8%, 2.7%, and a couple of.5%, respectively, they continued to run above the two% goal.

When Is the Canada CPI Data Due, and How Could It Affect USD/CAD?

Markets will totally give attention to Tuesday at 13:30 GMT, when Statistics Canada publishes January’s inflation figures. There’s a way of nervous anticipation, with merchants cautious that worth pressures might show extra cussed than hoped and preserve the broader uptrend intact.

A warmer-than-expected print would seemingly reignite issues that tariff-related costs are lastly filtering by to customers. That, in flip, might nudge the BoC in direction of a more cautious tone within the close to time period. It would additionally have a tendency to lend the Canadian Dollar (CAD) some short-term assist, as buyers reassess a coverage outlook that more and more hinges on how commerce tensions and their impression on inflation unfold.

Pablo Piovano, Senior Analyst at FXStreet, notes that the Canadian Dollar has surrendered some gains in the previous couple of days, motivating USD/CAD to rebound modestly previous the 1.3600 hurdle, all following its YTD ground slightly below the 1.3500 assist reached in late January.

Piovano signifies that the resurgence of a bullish tone might immediate spot to confront the February high at 1.3724 (February 6), forward of the provisional 55-day SMA round 1.3760. Further up comes the at all times related 200-day SMA close to 1.3820, prior to the interim 100-day SMA close to 1.3870 and the 2026 ceiling at 1.3928 (January 16).

On the flip aspect, Piovano factors out {that a} key assist lies on the 2026 backside, at 1.3481 (January 30). The lack of this stage might open the door to a go to to the September 2024 ground at 1.3418 (September 25).

“In addition, momentum indicators proceed to lean bearish: the Relative Strength Index (RSI) approaches the 45 mark, whereas the Average Directional Index (ADX) close to 28 is indicative of fairly a agency development,” he says.

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