Canadian Dollar Takes Hit as Inflation Rises Amid Tariff Uncertainty

Canada's July inflation rate rose to 3.0%, up from 2.8% in June, according to data released this morning. The increase was largely driven by gasoline prices, which jumped 25.7%, as well as higher travel costs around the World Cup festivities.

The median CPI, a measure of underlying inflation, remained more moderate at 2.0%. This suggests that the headline increase is concentrated rather than evidence of broad resurgence in price pressures.

The US has threatened to impose 50% tariffs on $20 billion worth of Canadian imports, with Wednesday's deadline looming. While Canadian and US officials remain in intense negotiations, reports suggest they are still far apart from a comprehensive agreement.