Canada’s annual inflation rate rose to 1.9% in June, meeting expectations, driven by higher prices for autos, clothing, and footwear. This is the last major economic indicator before the Bank of Canada’s rate decision. Economists predict the slight increase in prices and strong jobs report may deter a rate cut.

Money markets predict a 15% chance of a rate cut after the data release. The Bank of Canada will announce its decision on July 30. The Canadian dollar strengthened against the U.S. dollar following the inflation data release. Yields on government bonds also decreased slightly.

In June, durable goods prices, like autos and furniture, rose by 2.7% annually. Passenger vehicle prices increased by 4.1%. Clothing and footwear prices also went up by 2%, driven by trade uncertainty and tariffs. Inflation remained below 2% due to the removal of the consumer carbon levy on gasoline in April.

Gasoline prices saw a 13.4% decrease year-over-year in June. Economists and the central bank are closely monitoring core inflation measures. The CPI-median, excluding tax impacts, rose to 3.1%. The CPI-trim, which excludes extreme price changes, remained at 3% in June.

Read more at Yahoo Finance: Canada’s annual inflation rate in June slightly up to 1.9%