The loonie, as the currency is colloquially known, has strengthened steadily since June, when the Bank of Canada took a more hawkish turn, with the move getting fresh legs after the central bank hiked interest rates last week.

At the time, the central bank said it needed to look through soft inflation data and would wait for more economic data before committing to its next move, making June inflation and May retail sales data due out on Friday key to the short-term trend.

"The Canadian dollar is riding high, but it won't last forever, and any signs of weakness in inflation and in consumer spending could cause a sharp reversal," said Adam Button, currency analyst at ForexLive in Montreal.