Canada CPI Expected to Show Steady Inflation in August

The Canadian economy is expected to show steady inflation in August, according to recent forecasts. The Consumer Price Index (CPI) is predicted to remain unchanged at 3% year-over-year and rise by 0.3% on a monthly basis. This is below the 0.5% increase seen in July.

The Bank of Canada's (BoC) core measure, which strips food and energy costs, is forecasted to rise by 0.1%. The BoC has been closely monitoring inflation rates, with Governor Tiff Macklem warning that several rate hikes could be necessary if prices remain elevated or spread beyond the energy sector.

Market participants expect nearly 36 basis points of tightening by year-end, and a flat CPI reading in August may fuel bets on further rate hikes. This could provide fresh legs for the Canadian Dollar (CAD).