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  • Annual CPI comes in higher than expected in Canada.
  • USD/CAD drops sharply to 1.3250 area after data.

According to the inflation report published by Statistics Canada, the annual Consumer Price Index (CPI) in July stayed unchanged at 2% to beat the market expectation of 1.7%. Following June’s decline of 0.2%, monthly CPI arrived at +0.5% on a monthly basis in July.

Additionally, the Bank of Canada’s core CPI, which excludes volatile food and energy prices, came in at 2% on a yearly basis in July to fall short of analysts’ estimate of 2.3%.

With the initial market reaction, the Loonie gathered strength against its major peers and the USD/CAD pair dropped to a daily low of 1.3255.