Canadian dollar weakens by most in four weeks as commodities slide
- Copper fell 3.5%, while oil, one of Canada's main exports, settled 3.3% lower at $63.36 a barrel.
TORONTO: The Canadian dollar weakened against its US counterpart on Wednesday as commodity prices fell sharply, while domestic data showed inflation climbing in April at the fastest pace in a decade but at a rate less than in the United States.
The loonie was trading 0.6% lower at 1.2135 to the greenback, or 82.41 US cents, its biggest decline since April 20.
On Tuesday, it touched its strongest level since May 2015 at 1.2013.
Inflation in Canada rose to 3.4% in April from 2.2% in March, due mostly to the statistical comparison with last year when prices sank during pandemic shutdowns, data showed.
It was the highest annual increase since May 2011.
"The numbers are within expectations, a little bit stronger, not like a big blowout we saw in the US," said Darcy Briggs, a portfolio manager at Franklin Templeton Canada. "I don't expect much in the way of reaction from the Bank of Canada."
Data last week showed US CPI shot up 4.2% in the 12 months through April.
Wall Street and commodity prices have been on a tear in recent months but were pressured on Wednesday by fears that rising inflation could force the US Federal Reserve to pare back its support soon.
A "number" of Fed officials appeared ready to begin considering changes to monetary policy based on continued rapid progress in the economic recovery, minutes of the central bank's April meeting showed.
Copper fell 3.5%, while oil, one of Canada's main exports, settled 3.3% lower at $63.36 a barrel.
Canadian bond yields rose across a steeper curve, tracking the move in US Treasuries. The 10-year was up 2.6 basis points at 1.590%.
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