Canada: Annual CPI inflation unexpectedly rises to 4.4% in April from 4.3%
|- Annual CPI inflation in Canada rebounded to 4.4% in April.
- USD/CAD hits fresh daily low after data as Loonie rises across the board.
Inflation in Canada, as measured by the Consumer Price Index (CPI), rose to 4.4% on a yearly basis in April from the 19-month low of 4.3% in March, Statistics Canada (StatCan) reported on Tuesday. This reading came in against market forecast of a decline to 4.1%. “This was the first acceleration in headline consumer inflation since June 2022. On a year-over-year basis, higher rent prices and mortgage interest costs contributed the most to the all-items CPI increase in April 2023”, said StatCan.
On a monthly basis, the CPI rose by 0.7%, above the 0.4% of consensus, and accelerating from the 0.5% registered in March. “Prices for gasoline (+6.3%) contributed the most to the headline month-over-month movement. Excluding gasoline, the monthly CPI rose 0.5%,” Statistics Canada said.
Additionally, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, dropped to 4.1% on a yearly basis from 4.3% in March, compared to analysts' estimate of 3.9%.
Market reaction
The USD/CAD dropped from 1.3455 to levels under 1.3430, reaching fresh daily lows. The decline took palace even as the US Dollar strengthened following the US Retail Sales report. The Loonie rose across the board boosted by higher-than-expected Canadian CPI.
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