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The Canadian dollar gave back some of its earlier gains after the data, trading up 0.1 per cent at 1.3089 to the greenback, or 76.40 U.S. cents.
Headline inflation remains less than half of what it was before the coronavirus pandemic and well below the Bank of Canada’s 2 per cent target, economists noted. Still, two of the three core measures the central bank uses increased.
The common measure, which the Bank says is the best gauge of the economy’s underperformance, gained slightly to 1.6 per cent from 1.5 per cent in September. The CPI trim measure also increased to 1.8 per cent from 1.7 per cent, and the median remained at 1.9 per cent.
“The Bank of Canada has told us they’re not going to hike rates until inflation gets sustainably above their target, and we’re still below their target,” said Doug Porter, chief economists at BMO Capital Markets.
“But in the medium term, the resiliency of core does suggest that the bank may be forced to make a decision earlier than perhaps they thought.”
The Bank of Canada has said it expects interest rates to remain at current record lows into 2023.
© Thomson Reuters 2020
