Canadian dollar hits five-week low

The Canadian dollar weakened to its lowest in more than five weeks against the greenback on Friday after domestic data showing a slowdown in inflation suggested the Bank of Canada would be unlikely to speed up the pace of interest rate hikes.
The annual inflation rate in September dipped to 2.2 percent from 2.8 percent as price pressures from fuel and air travel eased. Analysts had forecast an annual rate of 2.7 percent. At 3:04 pm (1904 GMT), the Canadian dollar was trading 0.2 percent lower at 1.3115 to the greenback, or 76.25 US cents. The currency touched its weakest since September 11 at 1.3132.
For the week, the loonie declined 0.7 percent. It was the third consecutive week the loonie lost ground. Canadian government bond prices edged higher across much of a steeper yield curve, with the 10-year rising 5 Canadian cents to yield 2.493 percent. The gap between the 10-year yield and its US equivalent widened by 2.9 basis points to a spread of 70.5 basis points in favor of the US bond, the biggest gap since July 24.