Loonie Soars to Two-Week High Amid Strong Inflation Data

The Canadian dollar surged to a two-week high against the US dollar on Monday as inflation data exceeded expectations.

Canada's annual inflation rate rose to 3% in July, surpassing forecasts of 2.9%. This increase was largely driven by rising gasoline prices due to renewed US-Iran tensions.

The core inflation measures, CPI-trim and CPI-median, stood at 1.9% and 2%, respectively.

In addition to the strong inflation data, Canada's bond yields have increased about 17 basis points over the past month, marking the largest gain among G7 sovereign bonds except for Japan.