Canadian Inflation Hits 3%, Gas Prices Soar

Canada's annual inflation rate accelerated to 3% in July, slightly more than expected. The renewed US-Iran tensions drove up gasoline prices by 25.7%, compared to a 20.5% increase in June.

The Canadian dollar firmed after the data, trading up 0.17%. The inflation rate now sits at the ceiling of the Bank of Canada's 1-3% control range.

Core inflation measures CPI-trim and CPI-median came at 1.9% and 2%, respectively. Economists believe that with core inflation hovering around 2%, the midpoint of the central bank's target, the BoC is likely to keep its key policy rate on hold for the rest of the year.