It is expected to reduce inflation in Canada sharply in April

- Canadian inflation is expected to have lost more momentum in April.
- The main consumer price index is seen 1.6 % from the previous year.
- It seems that the Canadian dollar has moved to an autistic stage.
All attention will be on Statistics Canada this Tuesday, as the consumer price index launches in April (CPI), a measure of the main inflation that the Bank of Canada (BOC) is closely when the interest rates are determined.
The main inflation is expected to decrease sharply, with the annual consumer price index forecast of 1.6 % from 2.3 % in March. However, it is expected that the inflation has increased slightly, as it increased by 0.5 % against the previous 0.3 %.
Canada Bank will also export preferred basic inflation measures, which aim to strip the fluctuating price fluctuations for a clearer offer for basic trends. In March, the BOC’s primary consumer index increased by 2.2 % from the previous year.
While modern inflation data indicates that price pressures are dependent, the markets are expected to take carefully. The numbers do not reflect after the full impact of the recently imposed American trade tariffs within the Trump administration – an element that can make inflation forecast in the coming months. As a result, a cautious tone is likely to prevail among investors and policy makers alike.
What can we expect the inflation rate in Canada?
BOC retained the standard interest rate of 2.75 % last month, stopping after seven consecutive discounts and pointed to the uncertainty in the installation surrounding the American trade policy as a major reason for blocking its usual economic expectations.
Officials said the inability to predict the definitions imposed by the United States and the possibility of a wider global trade conflict made it impossible to provide a reliable view. Instead of its regular quarterly expectations, the bank issued two virtual scenarios to clarify the possible results:
In the most optimistic scenario, most definitions are at the end through negotiation. The bank said this is likely to lead to a temporary slowdown in Canadian and global growth, with inflation to 1.5 % for a year before returning to a 2 % goal.
A more intense scenario imagines a long global trade war. In this case, Canada will enter a deep stagnation, and inflation will exceed 3 % by mid -2016 before gradually returning to the targeted levels. The bank admitted that other results were possible, which confirms a high degree of economic uncertainty.
In the annual financial stability report (FSR), the central bank acknowledged that the system is still flexible at the present time, but also a sign of increased weaknesses in the event of continued trade tensions.
Officials pointed to the definitions imposed by US President Donald Trump on Canadian goods and Outua reprisals as possible threats. They said that although the financial sector is currently rising well, the continuous tariff battles may eventually harm banks and financial institutions by making it difficult for families and companies to manage their debts.
BOC noticed, in the short term, that the inability to predict American trade policy can lead to more market fluctuations and stress. In more extreme cases, this type of disorder can escalate to a wider market defect.
In the medium to long term, the bank said that a complete global trade war can have severe economic consequences.
When is the Cana CPI data due and how can it affect the US dollar/CAD?
The inflation data in Canada is scheduled to appear on Tuesday at 12:30 GMT, and the markets are preparing for a mixed image. While there is a general feeling that price pressures may have been somewhat eased, the details may go in both cases.
If inflation is more hot than expected, BOC may push to take a more honest position, which may give the Canadian dollar a batch. On the other hand, the most softening numbers are probably enhanced for more price cuts, leading to some pressure on the lovee.
However, the sharp jump in inflation is not necessarily good news. It can raise red flags about the health of the Canadian economy, and it is irony that this type of surprise may end in the currency as well. In short, the markets are closely monitoring – not only the title number, but for the broader message you send around the place where politics and growth tend.
The chief analyst Pablo Biovano of FXSTREET indicated that the US dollar/CAD has moved to a slightly lower autism range than the 200 -day simple moving average (SMA) at 1.4012.
“If the Canadian dollar is able to scan SMA for 200 days, the near -range look must turn into a more constructive group, allowing at the same time to refresh to collect a pace. 1.4792, published on February 3, return to vision.”
“The return of the Habbiya tone may motivate the US dollar/CAD to start a possible visit to 2025 at 1.3838, which was marked on April 11,” said Biovano.
Technically, Piovano reported that the US dollar/CAD currently refers to some dilapidated mood based on the RSI on the 50th threshold. He added that the average trend index (ADX) gives up 24 points to some loss of motivation for the current direction.
Economic indicator
BOC interest rate decision
the Canada Bank (BOC) announces the interest rate decision at the end of its eight meetings scheduled per year. If BOC believes that inflation will be higher than the target (Hawkish), this will raise interest rates in order to reduce it. This ascended with CAD because higher interest rates attract larger foreign capital flows. Likewise, if BOC sees a decrease in inflation without target, it will reduce interest rates in order to give the Canadian economy a boost in inflation. This is a declining CAD because it detracts from the foreign capital that flows into the country.
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The latest version:
Wed Apr 16, 2025 13:45
repetition:
irregular
actual:
2.75 %
consensus:
2.75 %
former:
2.75 %
source:
Canada Bank
Economic indicator
Consumer Prices Index (YOY)
BOC consumer price index, which you issued Canada Bank (BOC) on a monthly basis, which represents changes in the prices of Canadian consumer by comparing the cost of a fixed basket of goods and services. It is considered a measure of basic inflation because it excludes eight of the most muddy ingredients: fruits, vegetables, gasoline, fuel oil, natural gas, the benefits of mortgage, cities and tobacco products. Yoy reading compares prices in the reference month to the same month in the previous year. In general, high reading is seen as bullies of the Canadian dollar (CAD), while low reading is seen as declining.
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Next version:
Tuesday May 20, 2025 12:30
repetition:
monthly
consensus:
–
former:
2.2 %
source:
Canada statistics