The Canadian dollar climbed to the highest level this month after inflation rose faster than all economists’ forecasts in October, boosting speculation the Bank of Canada will signal it’s closer to raising interest rates.
The currency jumped the most in almost two months as the consumer price index increased 2.4 percent compared with the same month a year earlier, following the September pace of 2 percent, Statistics Canada said from Ottawa. The central bank meets Dec. 3 after leaving its benchmark lending rate at 1 percent last month. Canada’s dollar advanced earlier with global stocks and commodities after China cut interest rates for the first time since 2012.
“This is an input to the Bank of Canada potentially hiking rates,” Jack Spitz, managing director of foreign exchange at National Bank of Canada, said by phone from Montreal. “It does suggest there is some inflation potentially coming forward and as a result of that the Bank of Canada may take less of a dovish view going forward.”