The Canadian dollar traded relatively flat against its US counterpart in the middle of the trading week. The loonie has been gaining some momentum over the last month, buoyed by rallying energy commodities. But with more investors seeking shelter in the premier safe-haven asset, can the greenback regain supremacy over its northern rival? It might depend on inflation.

According to Statistics Canada, the producer price index (PPI) advanced at an annualized rate of 16.4% in February, up from 16.3% in January. On a monthly basis, producer prices climbed 3.1% last month, up from 2.5% in the previous months.

This was the sixth consecutive monthly increase and the largest monthly jump since January 1980.

Raw material prices climbed 29.8% year-over-year in February, slightly down from the 30.5% gain to start the year. Raw material prices also rose 6% month-over-month in February, down from 6.5% in January.

The biggest gains were concentrated in energy and petroleum products, non-ferrous metal products, softwood lumber, and intermediate food items.

Wholesale sales also edged up 0.9% in February, down from the 4.2% boost in January. Food, machinery equipment, and miscellaneous products led the gains, but sales of building materials and households goods tumbled.

In the coming days, manufacturing sales, average weekly earnings, and the January GDP numbers will be released.

The Canadian bond market was mostly red, with the benchmark 10-year bond down 0.098% to 2.321%. The one-year note was unchanged at 1.7%, while the 30-year bond plunged 0.129% to 2.436%. Also, the 50-year bond auction increased to 2.588%, up from 2.113% in the previous auction.

Energy commodities surged midweek. April West Texas Intermediate (WTI) crude oil futures surged $2.87, or 2.57%, to $114.63 per barrel on the New York Mercantile Exchange. April natural gas futures tumbled $0.064, or 1.22%, to $5.163 per million British thermal units (Btu).

Since Canada maintains a current account deficit, the economy relies on exports for growth. Because oil and gas remain the country’s top shipments, any significant price change can impact the economy or the loonie.

The USD/CAD currency pair fell 0.06% to 1.2563, from an opening of 1.2570, at 20:21 GMT on Wednesday. The EUR/CAD dropped 0.25% to 1.3829, from an opening of 1.3864.