Investing.com — The Canadian dollar fell against the U.S. dollar on Monday after new data showed inflation slowed in June, leading traders to reduce their expectations for Bank of Canada interest rate increases this year.
The loonie traded 0.3% lower at , or , moving back from its strongest intraday level since June 17 at 1.4001.
Canada’s annual inflation rate dropped to 2.8% in June from a 29-month high of 3.2% in May, driven by a sharp decline in gasoline costs. Core inflation measures that the Bank of Canada monitors closely also declined.
Following the inflation report, swap market data showed the probability of a Bank of Canada rate hike by December fell to 66% from 72%.
Oil prices, a key Canadian export, declined 0.4% to $82.16 a barrel. Expectations of renewed U.S.-Iran negotiations were offset by Yemen’s Houthis announcing a naval blockade against Saudi Arabia.
Data from the U.S. Commodity Futures Trading Commission released on Friday showed speculators increased bearish positions on the Canadian dollar to the highest level since January. Non-commercial net short positions climbed to 176,279 contracts as of July 14, up from 173,126 the previous week.
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SOURCE LINK : Canadian dollar weakens as inflation data cools rate hike bets By Investing.com
