Annual headline consumer inflation in Canada has cooled to 2.7% in April from 2.9% in March, the latest data by Statistics Canada showed.
The CPI reading came in line with market consensus and also marked the lowest inflation rate since March 2021.
The latest reading was also consistent with Bank of Canada’s projections that inflation should remain close to 3% during the first half of the year before easing below 2.5% during the second half.
The data added to expectations that BoC rate cuts were drawing near.
Last month, food inflation eased to 2.3% YoY from 3% YoY in March amid lower prices in grocery stores and restaurants.
Price increases also moderated for shelter (6.4% YoY in April compared to 6.5% YoY in March).
Meanwhile, inflation accelerated for transportation (3.1% YoY from 3% YoY in March) as a result of higher gasoline prices.
In month-over-month terms, consumer prices in the country went up 0.5% in April after a 0.6% rise in March.
The Canadian Dollar was 0.12% weaker on the day against its US counterpart, with the USD/CAD currency pair last trading at 1.3641.
The Canadian Dollar slipped to a one-week low of 1.3675 immediately after the data release as market players increased bets on a June rate cut.
“Swap-implied odds on a Bank of Canada rate cut at the June meeting are rising beyond the 50-percent threshold, sending the Canadian dollar sharply lower against the greenback,” Karl Schamotta, chief market strategist at Corpay, wrote in a client note, cited by Reuters.
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