The Canadian dollar spiked higher against its major counterparts in the European session on Wednesday, after a data showed that the nation's annual inflation accelerated at the fastest pace since 1991 in March.
Data from Statistics Canada showed that consumer prices jumped 6.7 percent year-on-year in March after rising by 5.7 percent in the previous month. This was the largest increase since January 1991. Economists had forecast a 6.1 percent spike.
Excluding gasoline, the CPI rose 5.5 percent year-over-year in March, the fastest pace since the introduction of the all-items excluding gasoline special aggregate in 1999, following a 4.7 percent gain in February. Core prices were expected to rise by 4.2 percent.
On a seasonally adjusted monthly basis, the CPI rose 0.9 percent in March, matching the largest increase on record. That follows the 0.8 percent increase in February.
Core consumer prices, excluding food and energy, climbed 0.6 percent in March following an increase of 0.4 percent in the previous month.
Positive earnings reports and higher crude oil prices further supported the currency.
The loonie climbed to 1.3544 against the euro and 0.9289 against the aussie, off its previous low of 1.3636 and a 5-day low of 0.9349, respectively. The loonie is seen finding resistance around 1.33 against the euro and 0.90 against the aussie.
The loonie reached as high as 1.2502 against the greenback, setting a 2-week high. Next key resistance for the currency is likely seen around the 1.24 level.
The loonie rose back to 102.42 against the yen following the data. It had touched nearly a 7-year high of 102.64 in the Asian session. If the loonie extends rise, 106.5 is possibly seen as its next resistance level.
Looking ahead, the Fed Beige book report will be released at 2 pm ET.
