Canada: Annual CPI jumps to 3.4% in April vs. 3.2% expected

• CPI in Canada rose at a stronger pace than expected in April.
• USD/CAD posts modest daily gains, stays below 1.2100.

Annual inflation in Canada, as measured by the Consumer Price Index (CPI), rose to 3.4% in April from 2.2% in March, the data published by Statistics Canada revealed on Wednesday. This reading came in higher than the market expectation of 3.2%. On a monthly basis, the CPI arrived at 0.5% to match March's print. 

Moreover, the Bank of Canada's (BoC) Core CPI, which excludes volatile food and energy prices, climbed to 2.3% on a yearly basis and surpassed analysts' estimate of 1.3% by a wide margin.

Market reaction

With the initial reaction, the USD/CAD pair edged lower but quickly regained its traction. As of writing, the pair was posting small daily gains at 1.2075.