Loonie Slumps Near 12-Day Low Against Stronger US Dollar

The Canadian dollar weakened on Monday, nearing a 12-day low against the U.S. dollar, as steady domestic inflation offered little support while rising U.S. rate-hike expectations and a stronger greenback outweighed the boost from surging oil prices.

At 16:43 a.m. ET, the USD/CAD exchange rate was around C$1.392, leaving the loonie about 0.3% weaker on the day after it touched a 12-day low of C$1.3929.

The data offered little fresh impetus for the Canadian dollar, as the headline inflation rate remained above the Bank of Canada's 2% target but underlying price pressures showed no broad acceleration.

Higher oil prices are typically supportive for the Canadian dollar because Canada is a major crude exporter, but the latest surge is also reviving inflation concerns and strengthening the case for tighter U.S. monetary policy.