TORONTO: The Canadian dollar eased versus the US currency on Tuesday, as the greenback was boosted by data showing higher consumer prices, while Canadian dollar traders sat on their hands ahead of key domestic data due at the end of the week.
At 10:20 a.m. (1420 GMT), the Canadian dollar was at C$1.0865 to the US dollar, or 92.04 US cents, down from Monday's close of C$1.0841 to the US dollar, or 92.24 US cents.
US consumer prices recorded their largest gain in more than a year in May, pointing to a firming of inflation pressures just as the US Federal Reserve begins a two-day policy meeting.
"The (US) dollar has picked up some support from the rising yields that we've seen at the longer end of the curve after the CPI numbers this morning," Shaun Osborne, chief currency strategist at TD Securities.
"I think along with that perhaps some focus on the FOMC (statement) tomorrow is helping underpin the US dollar here to a degree."
Canadian inflation and retail sales data due on Friday could sharpen the picture somewhat on the Canadian interest rate outlook. With upwards inflation pressure so far absent from the Canadian economic picture, investors currently do not expect a rate hike until well into 2015.
Canadian government bond prices were lower across the maturity curve, with the two-year down 22 Canadian cents to yield 1.111 percent and the benchmark 10-year down 21 Canadian cents to yield 2.316 percent.
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