07:14 AM EDT, 06/23/2026 (MT Newswires) -- The Canadian dollar weakened versus its US counterpart, driven by widening interest rate differentials, Societe Generale Economics said in a note on Tuesday.

A larger gap between two-year U.S. Treasury and Canadian government bond yields pushed the U.S. dollar higher against the Canadian currency, with the exchange rate up to a 14-month high of almost $1.42, wrote the bank in its note.

Markets showed little reaction to Canada's higher-than-expected May consumer price index print that was released on Monday, which saw annual headline inflation at 3.2% and core inflation remaining "well behaved" at 1.6%, said SocGen.

The Bank of Canada is seen keeping rates on hold for the "foreseeable future," according to SocGen.