Canada's inflation rate rose by 1.8% year-over-year in January. Additionally, the Bank of Canada (BoC) focuses on core consumer price index (CPI) data, which excludes volatile food and energy prices. In December, the core CPI declined by 0.3% month-over-month, though it remained up by 1.8% year-over-year.

The release of Canada’s inflation data directly impacts the Canadian dollar. However, analysts and investors anticipate that the Bank of Canada may further cut interest rates by an additional 50 basis points over the next 12 months, bringing the policy interest rate down to a low of 2.50%.

Source: Fxstreet