Canada's annual inflation rate rose to 2.5 percent in June, exceeding market expectations. Annual inflation has now exceeded the Bank of Canada's 2.0 percent target for the fifth straight month.

Canadian retail sales in May, meanwhile, rose 2.0 percent, its biggest increase in seven months, pushed up by sales at auto dealers and gasoline stations.

In early morning trading, the US dollar fell more than 1 percent against the Canadian currency to C$1.3133.