Canada's annual inflation rate accelerated to 3% in July from 2.8% in June, coming in slightly above Reuters-polled analysts' expectation of 2.9% and reaching the ceiling of the Bank of Canada's 1% to 3% control range. On a monthly basis, the consumer price index rose 0.5%, also above the 0.4% forecast, as renewed United States-Iran tensions lifted gasoline prices and travel tours became more expensive. Gasoline was the main driver of the annual increase, with prices rising 25.7% after a 20.5% gain in June. Travel tour prices also contributed as consumers paid more for hotels and flights to the United States, especially to cities that hosted the football World Cup. Core inflation remained relatively contained, with CPI-trim at 1.9% and CPI-median at 2%, compared with 1.9% for both measures a month earlier, reinforcing economists' view that the Bank of Canada is likely to keep its key policy rate on hold for the rest of the year. Grocery inflation slowed to 3.1% from 3.9%, though it still outpaced the all-items CPI for an 18th straight month, while shelter costs stayed subdued with a 1.3% increase. The Canadian dollar firmed 0.17% after the data to C$1.3851 per U.S. dollar, or 72.20 U.S. cents.