Canada: Annual CPI declines to 3.4% in May as expected

• Annual inflation in Canada declined from 4.4% in April to 3.4% in May.
•  USD/CAD rises after Canadian and US economic data to fresh high above 1.3160.

Annual inflation in Canada, as measured by the Consumer Price Index (CPI), declined to 3.4% in May from 4.4% in April, Statistics Canada reported on Tuesday. This reading came in line with market expectations. On a monthly basis, CPI rose 0.4% in May, compared to analysts' estimate of 0.5%.

Additionally, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, dropped to 3.7% on a yearly basis from 4.1% in April, below the 3.9% of market consensus.

Market reaction

The Canadian Dollar weakened after the report. USD/CAD edged higher after the report, reaching a fresh daily high at 1.3172.