Dollar Gains Against Yen, Peso, Canadian Dollar Amid Inflation Data

The Canadian dollar has strengthened beyond 1.37 per US dollar as investors weigh persistent domestic inflation against recent softness in the US dollar. Canada's trimmed-mean core CPI held steady at 3% in June, reinforcing expectations that the Bank of Canada will maintain a hawkish stance and keep its overnight rate at 2.75%. Meanwhile, President Trump's recent threat to impose 30% tariffs on European Union and Mexican imports starting August 1 has raised concerns about a potential escalation in trade tensions, especially regarding the USMCA trade agreement exemptions. Softer-than-expected US inflation and retail sales data have further weakened the US dollar, amplifying the Canadian dollar's gains. These developments contribute to increased trade-war jitters and market uncertainty around US trade policies and monetary stances.