BREAKING: CAD drops after dovish CPI data

Canadian CPI inflation data for January was released today at 1:30 pm GMT. Report was expected to show a further deceleration in consumer price growth, with headline CPI expected to drop from 3.4% to 3.3% YoY. 

Actual report turned out to be a huge dovish surprise. Headline inflation decelerated more than expected, from 3.4 to 2.9% YoY, while core measure decelerated from 2.6 to 2.4% YoY. On a monthly basis, headline gauge showed no change in prices while monthly core gauge ticked slightly higher.

Canada, CPI inflation for January

• Headline (annual): 2.9% YoY vs 3.3% YoY expected (3.4% YoY previously)
• Headline (monthly): 0.0% MoM vs 0.4% MoM expected (-0.3% MoM previously)
• Core (annual): 2.4% YoY vs 2.6% YoY previously
• Core (monthly): 0.1% MoM vs -0.5% MoM previously

CAD weakened following the release, with USDCAD jumping back above 1.3500 mark. Source: xStation5