• Annual CPI inflation in Canada continued to soften in March.
• USD/CAD trades in negative territory below 1.3400 after the data.

Inflation in Canada, as measured by the Consumer Price Index (CPI), declined to 4.3% on a yearly basis in March from 5.2% in February, Statistics Canada reported on Tuesday. This reading came in line with the market forecast. On a monthly basis, the CPI rose by 0.5% as expected. 

Additionally, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, dropped to 4.3% on a yearly basis from 4.7% in February, compared to analysts' estimate of 4.2%.

Market reaction

USD/CAD edged slightly lower with the initial reaction and the pair was last seen losing 0.2% on the day at 1.3365.