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Bank of Canada May Cut Rates in September After Latest Inflation Data, Says SocGen

BY MT Newswires | ECONOMIC | 08/20/25 10:06 AM EDT

10:06 AM EDT, 08/20/2025 (MT Newswires) -- Data on Wednesday in Canada revealed that the consumer price index slowed in July to 1.7% year over year thanks to accelerating deflation in energy prices (-16.1% year over year), noted Societe Generale.

The core (trimmed) rate was unchanged at 3.0% year over year.

The pass-through of tariffs was muted with goods prices rising a feeble 0.1% month over month, the same as June (0.3%), wrote the bank in a note to clients.

The Bank of Canada could "entertain" the idea of another 25bps rate cut in September to 2.50% which doesn't bode well for the Canadian dollar (CAD or loonie), stated SocGen.

USD/CAD maintained a bid tone in Asia after piercing the high of early August (1.3979), according to the bank. Short CAD/JPY could gain traction if the correction deepens in Tech stocks. Support runs at 106.26 (200dma) and 105.40.

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