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.

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.

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.