|The goal of this thesis is to investigate the inflationary effects of shocks in oil prices with a specific interest in commodity currency markets. The model includes a comparison between the United States and Canada. The individual effects of exchange rate, Consumer Price Index, Gross Domestic Product and oil price are observed. The study employs a structural vector autoregressive process (SVAR) that returns impulse response functions and variance decomposition analysis using a Sims choleski decomposition. The model is used to provide a comparison between the two countries and investigates possible explanations for differences such as exchange rate pass through. A preview into the findings indicates a significant difference in inflationary response between the two countries with incomplete findings for a possible explanation for this result.