TORONTO: The Canadian dollar weakened to a five-day low against its US counterpart on Wednesday as oil prices fell and domestic data showed inflation climbing as expected to the highest since February 2003.

Canada's annual inflation rate accelerated to 4.7% in October as energy prices jumped, data from Statistics Canada showed. The increase matched analysts estimates.

The Bank of Canada says inflation risks have increased but continues to view the recent dynamics as transitory.

The price of oil, one of Canada's major exports, declined after the International Energy Agency (IEA) and OPEC warned of impending oversupply and as COVID-19 cases in Europe increased the downside risks to demand recovery.

US crude prices fell 1.2% to $79.77 a barrel, while the Canadian dollar was trading 0.2% lower at 1.2584 to the greenback, or 79.47 US cents.

Canadian dollar rebounds as Macklem sees less economic slack

The currency traded in a range of 1.2540 to 1.2595. Last Friday, it touched its highest level in over five weeks at 1.2604.

Separate data showed that Canadian home prices were flat in October from September as a slowdown in housing sales weighed, although a limited supply of homes for sale could lead to fresh price escalation.

Floods and landslides that have killed at least one person have cut all rail access to Canada's largest port in the city of Vancouver, a spokesperson for the port said.

Canadian government bond yields were lower across the curve. The 10-year eased 2.9 basis points to 1.750%, after touching its highest since April 2019 at 1.811% earlier in the day.