Canadian Dollar Hits Two-Week High as Inflation Accelerates

The Canadian dollar has reached its highest level in two weeks against the US dollar due to rising inflation. The loonie was trading at 1.3850 per US dollar, a 0.2% increase from Monday's opening price. This marks the strongest intraday level since June 1.

Canada's annual inflation rate accelerated to 3% in July, surpassing expectations of 2.9%. The core inflation measures, CPI-trim and CPI-median, were lower at 1.9% and 2%, respectively.

Nathan Janzen and Abbey Xu from Royal Bank of Canada believe that the inflation report is consistent with a favorable economic growth trend and underlying inflation close to target. However, they acknowledge the uncertainty surrounding the approaching US tariff deadline, which could have significant consequences for certain industries and regions.