2026.07.2016:29:13UTC+00Canadian Dollar Slips on Cooling Inflation

The Canadian dollar weakened to around 1.41 per USD in July, retreating from a near one-month high after the release of June’s inflation data. Canada’s annual inflation rate slowed to 2.8% in June 2026 from 3.2% in May, coming in slightly below market expectations of 2.9%. Gasoline prices rose at a more moderate pace, while the Bank of Canada’s preferred core inflation measures dropped to their lowest levels in more than five years. This supported the BoC’s assessment that the effect of higher energy prices, driven by the Middle East oil supply crisis, is not spreading broadly through the economy. The softer inflation figures tempered expectations for additional Bank of Canada interest rate hikes this year, reducing the relative yield advantage that typically attracts foreign capital. In its latest meeting, the Bank of Canada left its key policy rate unchanged at 2.25%, in line with expectations.