Canadian December producer prices rise on energy, weaker dollar

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OTTAWA (Reuters) – Canadian producer prices rose by 0.7 percent in December from November thanks to higher energy prices as well as the effect of the weaker Canadian dollar, Statistics Canada said on Monday.

The increase was greater than the 0.3 percent advance forecast by market analysts and represented the biggest jump since the 1.5 percent recorded in February 2013. Statscan revised November’s month-on-month growth to 0.2 percent from an initial 0.1 percent.

Energy and petroleum prices climbed by 2.0 percent, pushed up by a 5.0 percent leap in the price of diesel fuel. Year-over-year producer prices rose by 1.4 percent compared to the 0.6 percent advance seen in December 2012.

Statscan said producer prices had also been boosted by the weaker Canadian dollar, which has slipped steadily since October 2013 and is now trading at more than four year lows. Some Canadian producers price their exports in U.S. dollars.

The dollar dropped by 1.4 percent against the greenback in December and without the measurable effect of the exchange rate, producer prices would have risen by 0.4 percent from November rather than 0.7 percent, Statscan said.

Raw materials prices jumped by 1.9 percent from November on a 3.3 percent increase in prices of crude energy products. Prices increased by 2.1 percent over the previous 12 months compared to the 6.3 percent year-on-year drop recorded in December 2012.

(Reporting by David Ljunggren; Editing by Nick Zieminski)