Canadian Inflation

Canada is experiencing relatively high inflation. According to ForexLive, the Canadian government is expected to release a report on Friday showing that the annual inflation rate for the month of April was 3.3%.

If the inflation rate turns out to be 3.3%, it will come as no surprise. The general analyst consensus remains right around that level.

Canada's projected April inflation rate is nearly identical to the inflation rate in the United States. Like the U.S., Canada's inflation is driven in large part by an increase in energy prices.

Interestingly, while U.S. inflation coincided with a weaker U.S. dollar (relative to other currencies) the Canadian dollar, while experiencing a recent decline, has been strengthening this year.

Traders who think that the Canadian dollar will continue to strengthen in the future might consider the ETF CurrencyShares Canadian Dollar Trust(NYSE: FXC). FXC attempts to move with the Canadian dollar and may do well in an environment with a rallying Canadian currency.