EUR Edges Higher on CAD's Inflation Surprise
The Canadian Dollar (CAD) has weakened against the Euro (EUR), despite hotter-than-expected inflation in Canada. The EUR/CAD exchange rate has edged higher, trading around 1.6070 at the time of writing, up 0.11% on the day.
This follows a stronger-than-expected acceleration in Canadian inflation, which rose 3% year-over-year (YoY) in July, exceeding market expectations. The Bank of Canada's core inflation measure also increased to 2.3% YoY and 0.2% month-over-month (MoM).
The higher gasoline and travel tour prices contributed to the acceleration in headline inflation, while slower growth in prices for food purchased from stores limited the increase.
Despite this, the Canadian Dollar fails to gain a lasting advantage over the Euro. The shared currency benefits from growing investor confidence that the European Central Bank (ECB) could tighten monetary policy further, with inflation remaining above the institution's 2% target.