Canadian Dollar Surges on Inflation Warning, Interest Rate Decision

The Canadian dollar has reached its highest level in over a week against the US dollar after the Bank of Canada's decision to keep interest rates unchanged. The central bank's warning about growing inflation risks has boosted investor confidence, causing the currency pair to trade at C$1.3817 per US dollar.

On Wednesday, the Canadian dollar gained 0.4% following the Bank of Canada's interest rate decision. However, Governor Tiff Macklem emphasized the potential for higher borrowing costs due to upside inflation risks.

The impact of higher energy prices and US tariffs on Canada's inflation outlook was also highlighted by the central bank. As a result, oil prices provided additional support for the commodity-linked Canadian dollar.