Canadian dollar rose against the US dollar on Tuesday, after an official report showed that consumer prices rose more-than-expected in March year-on-year, raising speculations over raise in interest rates by the Bank of Canada.

USD/CAD fell to 0.9599 against the Monday’s close of 0.9642.

Annual consumer price index (CPI) in Canada increased 3.3 percent in March, the largest increase since September 2008, Statistics Canada said on Tuesday. Markets had expected the inflation to rise by 2.8 percent.

Analysts expected that rise in inflation rate in March is likely to put pressure on the Bank of Canada to hike interest rates. The central bank kept the key lending rates unchanged at 1 percent for the fifth straight meeting in April.

“We believe that CAD is likely to remain firm if not rally further versus USD in the run-up to the resumption of the BoC’s monetary tightening cycle which, absent any unexpected events, may now occur before the end of Q2,” said a note Schneider Foreign Exchange.

We are boosting our end-Q2 forecast for CAD to C$0.93 from C$0.98 and we are lifting our 6-month view on CAD to C$0.96 from C$1.00, it said.