Canada: Annual CPI declines to 7% in August vs. 7.3% expected

• Inflation in Canada declined at a stronger pace than expected in August.
• USD/CAD trades in positive territory above 1.3300 after the data.

Inflation in Canada, as measured by the Consumer Price Index (CPI), fell to 7% in August from 7.6% in July, the data published by Statistics Canada showed on Tuesday. This reading came in lower than the market expectation of 7.3%.

The Bank of Canada's (BOC) Core CPI, which excludes volatile food and energy prices, declined to 5.8% on a yearly basis from 6.1% in July, compared to analysts' estimate of 6%.

Market reaction

With the initial reaction, USD/CAD rose sharply and was last seen gaining 0.55% on a daily basis at 1.3320.