Release Explanation: The CPI measures the average price of a fixed market basket of goods and services purchased by consumers, and therefore give an overall read of inflationary pressures. It is the most widely used Inflation indicator of central banks, institutions, and governments. It is used to calculate cost of living numbers for government programs. Each regional central bank will have their own CPI target rate, and each will differ in line with the way they individually want to control the aspects of their own economies.
Trade Desk Thoughts: The rate of inflation rose more than expected in February, as did the core number. The CPI number came in at 0.7% while the Core CPI came rose 0.5%.
The upward pressure In February came primarily from two sources: higher food and shelter costs. Food prices, the largest factor, increased 7.4% during the 12-month period to February, on the heels of a 7.3% increase in January. Shelter costs, the second largest, increased 3.0%, slightly slower than the 3.3% rise in January.
These gains offset lower transportation costs, which continued to exert strong downward pressure on consumer prices in February. Transportation costs were down as a result of lower prices for gasoline and for purchasing and leasing passenger vehicles.
Forex Technical Reaction: The cad made a 40-pip spike during the news release. Currently, the pair trades just above the 100-day simple moving average, after it dropped 60 pips tonight.