Canada: Annual CPI rises to 3.7% in July vs. 3.4% expected

• CPI inflation in Canada rose at a stronger pace than expected in July.
• USD/CAD lost its traction after the data and closes in on 1.2600.

Annual inflation in Canada, as measured by the Consumer Price Index (CPI), advanced to 3.7% in July from 3.1% in June, the data published by Statistics Canada revealed on Wednesday. This reading came in higher than the market expectation of 3.4%. On a monthly basis, the CPI rose to 0.6% from 0.3%.

Moreover, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, climbed to 33% from 2.7%, compared to analysts' estimate of 2.8%.

Market reaction

With the initial reaction, the USD/CAD pair turned south and was last seen losing 0.2% on the day at 1.2605.