The Canadian dollar lost ground following the Consumer Price Index (CPI) results for April showed a slowing in inflation. The decline in CPI means the Bank of Canada could delay interest rate hikes and this pushed the loonie to 96.90 cents versus the U.S. dollar at 7:24 a.m. in Toronto, from 96.76 cents yesterday.
Last month, the Bank of Canada left the benchmark lending rate unchanged at 1 percent and analysts expect the Bank to maintain the 1 percent target when it meets on May 31st. In a speech on May 16th, Governor Mark Carney said the Bank expects inflation to remain above 3 percent for the short-term, slowing to 2 percent by the middle of next year.
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