USD/CAD – CAD trades weaker on BoC preferred inflation measure miss

The annual inflation rate in Canada accelerated slightly in April on broad-based price increases for items such as mortgage payments, vehicles and fresh vegetables.

According to Stats Canada, Canada’s CPI rose +2.0% y/y, after a +1.9% advance in March.

On a month-over-month basis, inflation climbed +0.4%, led by higher prices for gasoline and women’s clothing.

However, the Bank of Canada (BoC) preferred measures for underlying inflation moved down. The average annual gain for the three core-inflation measures came in at +1.9% m/m vs. March’s +2%.

CAD is trading at the low of the day so far, the USD is up +0.2% at C$1.3490.

U.S retail sales miss

South of the Canadian border, an important measure of consumer spending fell in April, signalling spending was sluggish stateside as Q2 begins.

Retail sales declined a seasonally adjusted -0.2% in April m/m according to the Commerce Department.

The drop fell short of the +0.2% increase the market was expecting. The disappointing print has dealers increasing the odds for a Fed rate cut sooner than later.

Dollar Stuck in Contained Vortex

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