CIBC Capital Markets economist Avery Shenfeld warns that Canada's weaker currency could complicate the Bank of Canada's rate outlook if the U.S. dollar strengthens further amid trade tensions. The loonie has lost about 5% against the Bank of Canada's trade-weighted basket since early summer 2025, and historical models suggest this could add around 0.3 percentage points to inflation at peak impact. CIBC expects annual inflation to rise to 3.2% in September from 3.0% in August, mainly on higher gasoline prices, while core measures should stay closer to 2%, supporting an unchanged rate. A threatened 50% U.S. tariff on Canadian autos and parts from January 1 could add pressure, and if oil prices fall, the central bank might consider cutting rates next year. CIBC notes a weaker loonie offers exporters only limited relief, since many rely on inputs priced in U.S. dollars.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: CIBC warns of inflation risks as ‘leaky loonie’ faces further slide
Read the original on Yahoo Finance ↗
Related tickers and likely impact
USD/CAD
▲ Likely positiveRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/15/2026 | 1.41850 |
| Change that session | -0.35% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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