BREAKING: USDCAD ticks higher after inflation data from Canada 💡

01:30 PM BST, Canada - Inflation Data for August:

• Canada CPI NSA (M/M) Aug: -0.1% (est 0.0%; prev 0.3%)
• CPI (Y/Y): 1.9% (est 2.0%; prev 1.7%)
• CPI Core - Median (Y/Y): 3.1% (est 3.1%; prev 3.1%)
• CPI Core - Trim (Y/Y): 3.0% (est 3.0%; prev 3.0%; prev R 3.1%)

The Consumer Price Index (CPI) rose 1.9% on a year-over-year basis in August, up from a 1.7% increase in July. Gasoline prices fell to a lesser extent year over year in August (-12.7%) than in July (-16.1%), leading to faster growth in headline inflation. Excluding gasoline, the CPI rose 2.4% in August, after increasing 2.5% in each of the previous three months.

Moderating the acceleration in the all-items CPI were lower prices for travel tours and fresh fruit compared with July.

The CPI decreased 0.1% month over month in August. On a seasonally adjusted monthly basis, the CPI was up 0.2%.

Despite a higher reading for August, inflation is below expectations and, more importantly, down on a monthly basis. This increases the chances of a cut by the Bank of Canada tomorrow. Nevertheless, the US dollar is being heavily sold off today ahead of the Fed's decision. Good data from the US and weaker data from Canada are causing a slight rebound in USDCAD, but on a daily basis, the pair is still extending yesterday's strong pullback.