You are visiting the website that is operated by Ultima Markets Ltd, a licensed investment firm by the Financial Services Commission “FSC” of Mauritius, under license number GB 23201593. Please be advised that Ultima Markets Ltd does not have legal entities in the European Union.
If you wish to open an account in an EU investment firm and protected by EU laws, you will be redirected to Ultima Markets Cyprus Ltd (the “CIF”), a Cyprus investment firm duly licensed and regulated by the Cyprus Securities and Exchange Commission with license number 426/23.
On Tuesday, Canada’s annual inflation rate dropped to 2.5% in July, aligning with expectations. Despite this, the Canadian dollar weakened slightly, though USD/CAD slipped 0.1% to close at 1.3620, which was influenced by the significant weakness in the U.S. dollar due to expectations of a potential interest rate cut.
(USD/CAD Daily Price Chart)
The current inflation rate is now the nearest to the Canadian central bank’s 2% target since it reached 2.2% in March 2021, a time when prices started climbing roughly a year after the onset of the coronavirus pandemic.
The Bank of Canada has already reduced its policy rate in the last two meetings, lowering it from 5% to 4.5%. As a result, markets anticipate another 25-basis point cut at the upcoming rate announcement on September 4, with the possibility of three additional 25 basis point cuts by year-end. Many economists are also forecasting a similar rate reduction path, which could bring the benchmark rate down to 3.75% by the end of the year.
(Benchmark interest rate and year-on-year change in CPI inflation)
Disclaimer
Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.