Annual inflation reaches its highest level in six years and raises discussions on rising rates

Canada 's annual inflation rate peaked at 2.5% in June as retail sales surged in May, helping to push up the Canadian dollar and talk about it. another rate hike this year. Prices had helped push up the annual inflation rate to 2.6% in February 2012. Analysts polled by Reuters had forecast a rate of 2.4%.

The Canadian dollar has extended its gains against the US dollar.

The Central Bank, which says it will reduce stimulus as the economy grows stronger, raised its interest rates for the fourth time in a year and announced other increases. "This adds to the impression that the Bank may well start again in September," said Derek Holt, vice president of financial markets economics at Scotiabank.

surpbaded the Bank of Canada's target of 2.0% for a fifth consecutive month

The Canadian dollar rose rapidly to US $ 1.3144, or 76.08 US cents, versus US $ 1.3239 or US 75.53 cents

. in May, it jumped 2.0%, its largest increase in seven months, on sales of car dealerships and gas stations.

"I do not think that one report can tip the scales, but these two reports Doug Porter, Chief Economist at BMO Capital Markets

Market Expectations of a Rising September interest rate, reflected in the overnight index swap market, increased from 6.80% to 10.85%. The story continues under the advertisement