Canadian Core CPI and Headline CPI both beat analyst forecasts in September but overall inflation has begun to slow on a yearly basis, Statistics Canada reported today.

Headline Consumer Price Index came in at 0.1% MoM compared to the -0.1% that had been expected for September. This brought the yearly number to 3.4%, down from 3.5% in the previous month. August’s reading had been the highest in more than 5 years.

The slowing of prices was due in most part to Shelter (down 0.6% MoM), Clothing and Footwear (down 0.3% MoM) and Transportation (down 0.6% MoM) on a seasonally adjusted basis.

Core CPI, which strips out the most volatile items, increased by 0.4% MoM, better than the 0.3% that had been expected. On a yearly basis Core CPI now stands at 1.7%, unchanged from the previous month.

Will today’s data influence the BOC at their next interest rate meeting on December 9th? Probably not. The BOC’s primary concern is the dwindling economy and falling commodity prices. The Bank sees inflation falling below 1.0% over the coming year.

This week’s BOC Interest Rate Statement saw the Overnight rate cut by 0.25% to 2.25%. The USD CAD climbed to its highest level since May 2005 today, recording a high of 1.2841.

Canadian Core CPI beat expectations for the month of August, Statistics Canada announced today.

Seasonally adjusted, the Core index increased 0.3% MoM in August, beating expectations of a 0.1% increase. This is also up from the 0.1% seen in July.

Today’s number hauls the yearly Core CPI up to 1.7%, better than the 1.6% expected and the 1.5% seen over the last four 12 month periods.

The headline Consumer Price Index, or raw number, came in slightly worse than expected on a MoM basis. A figure of -0.2% was reported in comparison to -0.1% expected. Overall, this brings the YoY number to 3.5%, up from 3.4% in July.

The Bank of Canada’s Core CPI excludes fruit, fruit preparations and nuts, vegetables and vegetable preparations, mortgage interest costs, natural gas, fuel oil and other fuels, gasoline, inner-city transportation and tobacco products and smokers’ supplies. This would account for the difference between headline and Core CPI.

Among the components weighing on the all-items CPI were transportation down 2.1% MoM and energy which registered -3.0% MoM. However, on a yearly basis transportation and energy are still up 5.8% and 20.2% respectively.

The Canadian Dollar’s reaction to the data was fairly tame, managing an intra-day low of 1.0303 in the USDCAD. However, traders are still very much preoccupied by the US Fed Wall Street bailout.