Canadian dollar hits two-week low

TORONTO — The Canadian dollar weakened against its U.S. counterpart on Wednesday as lower oil prices offset domestic data showing a pickup in underlying inflation, while investors awaited an interest rate decision from the Bank of Canada.

The loonie was trading 0.2 per cent lower at 1.2628 to the greenback, or 79.19 U.S. cents, having touched its weakest intraday level since April 7 at 1.2634.

Canada’s annual inflation rate in March accelerated to 2.2 per cent, both on higher gasoline prices and because of the effect of last year’s sharp deceleration caused by the coronavirus pandemic, Statistics Canada said.

The average of the Bank of Canada’s three core measures was 1.9 per cent, up from 1.8 per cent.

Later in the day, the central bank updated its growth and inflation forecasts, hiking its outlook for the Canadian economy and suggesting rates could rise sooner than the previous forecast of sometime in 2023.