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Canadian Dollar Falls to Six-Week Low as Inflation Below Target

Aug. 23 (Bloomberg) -- Canada’s dollar dropped to its lowest level in more than six weeks as a report showed consumer prices advanced less than the central bank’s inflation target in July for a 15th month.

The currency fell for a sixth day, the longest slump in two months, after weakening yesterday as a report showed retail sales shrank more than forecast in June. The consumer price index increased 1.3 percent from a year earlier, less than the 1.4 percent gain forecast in a Bloomberg survey. The central bank’s target is 2 percent. The government issues data on gross domestic product Aug. 30.

“The lower Canadian dollar is a reflection of the theme we’ve seen throughout the week, which is weaker data across the board,” David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD Securities unit, said by phone from Toronto.

The loonie, as Canada’s currency is nicknamed for the image of the aquatic bird on the C$1 coin, depreciated 0.3 percent to C$1.0548 per U.S. dollar at 9:02 a.m. in Toronto. It touched C$1.0570, the weakest intraday level since July 9. One Canadian dollar purchases 94.81 U.S. cents.

Canadian government bonds were little changed, with the benchmark 10-year security yielding 2.75 percent after climbing yesterday to a two-year high of 2.78 percent.

Oil, Canada’s biggest export, headed for a weekly slide, trading at $105.13 a barrel in New York.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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