• Annual inflation in Canada declined more than expected in February.
•  USD/CAD trades with marginal daily gains above 1.3650.

Annual inflation in Canada, as measured by the Consumer Price Index (CPI), declined to 5.2% in February from 5.9% in January, Statistics Canada reported on Tuesday. This reading came in below the market expectation of 5.4%. On a monthly basis, CPI rose 0.4% in February, compared to analysts' estimate of 0.6%.

Additionally, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, dropped to 4.7% on a yearly basis from 5% in January.

Market reaction

USD/CAD edged higher with the initial reaction and was last seen rising 0.05% on the day at 1.3672.