Canada inflation rate above forecasts
The annual inflation rate in Canada rose to 3.40 % in April from 2.2% in March and above market expectations of 3.2%. Still, it is the steepest inflation rate in a year. It is the biggest inflation reading since May 2011, with a significant proportion of this increase attributable to a steep decline in prices in April 2020 when the coronavirus pandemic hit demand and prices hard. Prices rose in every major component on a year-over-year basis. Transportation prices (+9.4%) increased in April, mainly because of higher gasoline prices compared with April 2020. On a monthly basis, consumer prices remain unchanged at 0.5% , still above market expectations of 0.4%.
USDCAD broke below 1.2072 support after today’s data releases and is currently testing 50 SMA (green line). Should break lower occur, then next support at 1.2014 may be at risk.