Canada’s November inflation report delivered a steady headline print while offering the Bank of Canada (BOC) its first clear signal in months that underlying price pressures are finally cooling.

Statistics Canada reported headline CPI unchanged at 2.2% y/y in November, matching October’s rate but coming in slightly below the 2.3% consensus forecast. Monthly CPI rose 0.1%, meeting expectations and down from October’s 0.2% increase.

The key development came from the BOC’s preferred core measures, which had stubbornly hovered around 3% since April, when U.S. tariffs began affecting Canadian prices.

Both CPI-median and CPI-trim fell to 2.8% from 3.0% in October, marking the first time since March that these measures dropped below the upper end of the central bank’s 1-3% control range.

Key Takeaways

• Headline inflation held at 2.2% y/y in November, slightly below the 2.3% consensus but unchanged from October
• Core inflation measures finally broke below 3%, with both CPI-median and CPI-trim falling to 2.8% from 3.0% the previous month
• Food inflation accelerated to 4.2% y/y, the fastest pace since December 2023, driven by grocery prices rising 4.7% and restaurant costs up 3.3%
• Gasoline prices declined 7.8% y/y, a smaller drop than October’s 9.4% decrease, though monthly prices rose 1.8%
• Rent inflation cooled to 4.7% from 5.2%, while services inflation slowed to 2.8% from 3.2% as travel costs declined sharply

Link to official Statistics Canada Consumer Price Index (November 2025) 

The slowdown in core inflation helped calm fears that stubborn inflation and weak growth were happening at the same time, even as food prices stayed high.

With CPI median and CPI trim finally slipping below 3%, economists see underlying inflation moving closer to the 2% target. That supports the idea that the BOC can stay on pause for longer, rather than rushing into more cuts or worrying about rate hikes.

Market Reactions

Canadian Dollar vs. Major Currencies: 5-min

Overlay of CAD vs. Major Currencies Chart by TradingView

Canada’s two-year government bond yields declined 2.3 basis points to 2.486%, reflecting some reduction in rate hike expectations as the data confirmed that underlying inflation pressures were easing rather than building.

But while the easing in core inflation was a positive sign, the central bank had already said at its December 10 meeting that interest rates were “about the right level” after a hefty 275 basis points of cuts. Governor Tiff Macklem also made it clear the bank is comfortable staying on hold for now while it watches how the economy reacts to ongoing trade tensions with the U.S.

This is likely why the Canadian dollar failed to sustain its initial post-event moves during the U.S. session. The Loonie, which firmed shortly before Canada’s CPI release, briefly dipped at the cooler core CPI prints but soon saw mixed price action against its major counterparts.

The comdoll found an intraday floor a few hours into the U.S. session, and finished the session near its pre-CPI levels. CAD finished the day mixed, trading higher against safe havens USD and CHF and fellow comdolls AUD and NZD, but lower against EUR, JPY, and GBP.