Canada annual CPI inflation softens to 3.1% in October vs. 3.2% expected

Annual inflation in Canada declined at a faster pace than forecast in October.
USD/CAD trades in negative territory at around 1.3700 after the data.

Eren Sengezer FXStreet

Inflation in Canada, as measured by the change in the Consumer Price Index (CPI), softened to 3.1% on a yearly basis in October from 3.8% in September. This reading came in below the market expectation of 3.2%. On a monthly basis, the CPI rose 0.1%, matching analysts' estimate.

"The year-over-year deceleration was largely a result of lower prices for gasoline (-7.8%) in October," Statistics Canada noted in the press release. "Excluding gasoline, the CPI rose 3.6% in October, following a 3.7% increase in September."

Moreover, the Bank of Canada reported that the monthly Core CPI, which excludes volatile food and energy prices, increased 0.3%, while the annual Core CPI edged lower to 2.7% from 2.8%.

Market reaction

USD/CAD stays under modest bearish pressure and trades in negative territory at around 1.3700 after the inflation report.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD breaks below 1.1800, two-week lows

EUR/USD’s selling pressure is gathering pace now, breaching below the key 1.1800 yardstick to hit new two-week troughs on Wednesday. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and ahead of the publication of the FOMC Minutes.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.