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USDCAD : Increase in CPI Gave a Lifeline To CAD

CAD strengthened against USD after the Statistics Canada reported CPI m/m which shows that the Consumer Price Index (CPI) rose 1.5% in 12 months to January, after a 1.2% increase in December. The increase in CPI is a good news for the central bank who was concerned over the inflation rate being too low for its comfort zone.

The main driver of the increase in CPI was higher shelter cost. From the above graph we can see the change in prices of the major components. On a seasonally adjusted monthly basis the CPI rose .2% in January matching the increase in December.