Canada annual CPI inflation stays unchanged at 2.2% in November vs. 2.4% expected
Annual inflation in Canada, as measured by the change in the Consumer Price Index (CPI), remained unchanged at 2.2% in November, Statistics Canada reported on Monday. This reading came in below the market expectation of 2.4%.
On a monthly basis, the CPI rose by 0.1% following the 0.2% increase recorded in October.
Additionally, the Bank of Canada's Core CPI declined by 0.1% on a monthly basis, while the annual core CPI rose by 2.9%, matching October's print.
Market reaction
These data failed to trigger a noticeable market reaction. At the time of press, USD/CAD was trading at 1.3765, losing 0.05% on a daily basis.
Canadian Dollar Price This Month
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies this month. Canadian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.37% | -1.15% | -0.71% | -1.53% | -1.60% | -1.08% | -0.96% | |
| EUR | 1.37% | 0.22% | 0.67% | -0.16% | -0.24% | 0.29% | 0.41% | |
| GBP | 1.15% | -0.22% | 0.71% | -0.39% | -0.46% | 0.06% | 0.19% | |
| JPY | 0.71% | -0.67% | -0.71% | -0.82% | -0.92% | -0.39% | -0.27% | |
| CAD | 1.53% | 0.16% | 0.39% | 0.82% | -0.13% | 0.45% | 0.57% | |
| AUD | 1.60% | 0.24% | 0.46% | 0.92% | 0.13% | 0.52% | 0.65% | |
| NZD | 1.08% | -0.29% | -0.06% | 0.39% | -0.45% | -0.52% | 0.13% | |
| CHF | 0.96% | -0.41% | -0.19% | 0.27% | -0.57% | -0.65% | -0.13% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
This section below was published as a preview of the Canada inflation data at 11:04 GMT.
Canada’s Consumer Price Index (CPI) data for November is scheduled to be published today at 13:30 GMT.
Statistics Canada is expected to show that the headline inflation grew at an annualized pace of 2.4%, faster than 2.2% in October. Signs of price pressures rising at a faster pace would further diminish expectations of further interest rate cuts by the Bank of Canada (BoC) in the near term.
The BoC is unlikely to raise interest rates sooner as it reiterated in the monetary policy statement that the “current rate is at about the right level to keep inflation close to 2% as long as the economy and inflation evolve in line with projections”.
In the policy statement, the BoC also stated that the “underlying inflation is still around 2.5%”; however, the “CPI inflation will remain close to the 2% target as economic slack roughly offsets cost pressures linked to trade reconfiguration”.
How could Canada’s inflation data affect USD/CAD?
USD/CAD trades flat around 1.3773 during Monday's European trading session ahead of Canada's CPI data release. The 20-day Exponential Moving Average (EMA) slopes lower, and price holds beneath it, preserving a bearish bias and capping rebound attempts.
The 14-day Relative Strength Index (RSI) at 29 (oversold) signals stretched downside momentum. Measured from the 1.3549 low to the 1.4127 high, the 61.8% retracement at 1.3770 acts as key support; a close below it would extend the slide towards the 78.6% Fibo retracement at 1.3675.
On a bounce, the 50% retracement at 1.3838 stands as the initial barrier; failure to clear it would keep risks skewed to further weakness.
(The technical analysis of this story was written with the help of an AI tool)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
