Canadian Dollar Steady Amid Energy-Driven Inflation

The Canadian dollar steadied after July's inflation data showed a 3.0% year-over-year increase, exceeding expectations of 2.9%. The Bank of Canada has maintained its prolonged rate hold, citing contained underlying price pressures.

The monthly gain was significant at 0.5%, higher than the forecasted 0.4%. Gasoline prices were the main driver, increasing by 25.7% year-over-year from 20.5% in June. The Middle East conflict and resulting energy costs contributed to this rise.

Excluding gasoline, the Consumer Price Index (CPI) held steady at 2.2% for a third consecutive month. This is seen as good news, but oil prices need to ease soon for the Bank of Canada to consider adjusting its policy rate. The next CPI release is due in the UK on Wednesday.