Canada: Annual CPI in December stayed unchanged at 2.2% as expected

• Core inflation in Canada dropped to 1.7% in November from 1.9%. 
• CAD seems to be weakening against its rivals after CPI data. 

Inflation in Canada, as measured by the Consumer Price Index (CPI), in December stayed unchanged at 2.2% on a yearly basis as expected, the data published by Statistics Canada showed on Wednesday. On a monthly basis, the CPI remained steady as well.

Furthermore, the Bank of Canada's core CPI, which strips volatile food and energy prices, dropped to 1.7% in November from 1.9% on a yearly basis and came in below the market expectation of 1.9%. On a monthly basis, the BoC's core CPI printed -0.4%.

Market reaction

The loonie weakened modestly on lower-than-expected core CPI reading and the USD/CAD pair recovered to 1.3050 area, where it was still down 0.1% on a daily basis.