# CAD RMPI Jul 2026: Shocking Drop Weakens Loonie? > Canada's Raw Materials Price Index (RMPI) for July 2026 plunges to -6.9%, far below the -1.5% forecast. Watch CAD/JPY for potential downside. **URL:** https://forexcalendar.app/cad-rmpi-mm-jul-24-2026/ --- # CAD RMPI July 2026: What This Shocking Drop Means for the Loonie ## TL;DR Canada's Raw Materials Price Index (RMPI) for July 2026 fell sharply to -6.9%, a significant miss compared to the -1.5% forecast and a stark reversal from 0.7% prior. This indicates falling input costs for manufacturers, potentially signalling easing inflation pressures and a weaker **CAD**. Monitor **CAD/JPY**. ## The Numbers **Actual:** -6.9% **Forecast:** -1.5% **Previous:** 0.7% The **RMPI m/m** for July 2026 came in at a deeply negative **-6.9%**, a substantial miss against the forecast of **-1.5%**. This represents a significant deterioration from the previous month's **0.7%** reading. The actual figure is 5.4 percentage points lower than anticipated, signalling a sharp decline in the prices manufacturers are paying for raw materials. ## What This Indicator Measures The Raw Materials Price Index (RMPI) tracks the change in prices of raw materials purchased by Canadian manufacturers. Think of it as the initial input cost before goods are processed into final products. When these prices rise, manufacturers often face higher production expenses. Conversely, a significant drop, as seen this month, means their input costs are decreasing. For the Bank of Canada, this data is crucial because it acts as a leading indicator for consumer inflation. If manufacturers are paying less for their raw materials, they may eventually pass those savings on, leading to lower consumer prices. Alternatively, persistent declines could signal weakening demand in the broader economy, prompting concerns about growth. ## Why This Moves the Market This sharp decline in the **RMPI** is likely to be perceived negatively for the **Canadian Dollar (CAD)**. Falling input costs can reduce inflationary pressures, which might influence the Bank of Canada's monetary policy stance. If inflation is expected to cool, the central bank might be less inclined to raise interest rates, or even consider lowering them sooner than previously expected. Lower interest rate expectations in Canada, relative to other major economies, can lead to a narrower yield differential. This makes Canadian assets less attractive to foreign investors seeking higher returns. Consequently, demand for the **CAD** could decrease, leading to its depreciation against other major currencies. We're looking at a potential scenario where falling raw material prices translate directly into a weaker **Loonie**. ## Currency Pairs to Watch * **CAD/JPY:** Potentially bearish for **CAD** on widening yield differentials favouring **JPY** if the Bank of Canada pivots to a more dovish stance. * **USD/CAD:** Likely bullish for **USD/CAD** as a weaker **CAD** translates to a higher price, especially if **USD** remains supported by different economic factors. * **EUR/CAD:** Potentially bullish for **EUR/CAD** as the **CAD** weakens against the Euro. ## Trading Implications for New Traders Expect elevated volatility in **CAD** pairs immediately following this release. The sharp deviation from the forecast suggests a potential for a swift market reaction. However, new traders should exercise caution and avoid chasing the initial spike. This can often be driven by algorithmic reactions or thin liquidity. A confirming move would involve sustained price action in the direction indicated by the release (i.e., **CAD** depreciation) over the next few hours or trading sessions. Look for **USD/CAD** to hold its gains or continue moving higher, or for **CAD/JPY** to break key support levels. A fade, or a reversal of the initial move, would occur if market participants deem the reaction overdone or if other factors quickly overshadow the **RMPI** data. ## FAQ ### Is a lower-than-expected RMPI bullish or bearish for CAD? A lower-than-expected **RMPI** is generally considered **bearish** for the **CAD**. It signals falling input costs for manufacturers, which can lead to lower consumer inflation and potentially influence the Bank of Canada towards a more dovish monetary policy stance. ### How long does the market reaction to RMPI usually last? The immediate reaction to the **RMPI** can last from a few minutes to a couple of hours. However, its lasting impact depends on whether it influences broader economic sentiment and subsequent central bank policy expectations. Longer-term trends require confirmation from other indicators. ### Which currency pairs are most sensitive to RMPI? **CAD** crosses are most sensitive, particularly **USD/CAD**, **EUR/CAD**, and **CAD/JPY**. The magnitude of the move also depends on the deviation from the forecast and the prevailing market sentiment towards the **Canadian Dollar** and its economic outlook. ### When is the next RMPI release? The next **RMPI m/m** release from Statistics Canada is scheduled for **August 20, 2026**, covering the data for the month of August 2026. This will provide the market with an update on manufacturing input costs. ### What does a negative RMPI mean? A negative **RMPI** value means that the prices manufacturers paid for raw materials have decreased compared to the previous period. This indicates deflationary pressures at the producer level and could eventually translate to lower consumer prices if sustained. ## What to Watch Next Keep a close eye on upcoming **Canadian inflation data (CPI)** and the Bank of Canada's next **monetary policy announcement**. These will be critical in determining if the softening in raw material prices translates into a sustained shift in inflation expectations and, consequently, affects interest rate decisions. Further weak economic data could reinforce a dovish outlook for the **CAD**.