Canada's annual inflation rate stands at 1.8%, down from 1.9% in November, while the core inflation rate, which excludes volatile food and energy prices, remains steady at 1.8%.

Following the inflation announcement, the Canadian dollar weakened significantly, marking its largest drop since 2020. Meanwhile, investors are closely monitoring additional economic data releases to assess the central bank’s future policy direction.

However, Tiff Macklem, Governor of the Bank of Canada, has signaled the possibility of further interest rate cuts in the future, while emphasizing the need for caution given the increasing economic uncertainties.

Source: Fxstreet