Canadian dollar weakens 0.1 against the greenback
Trades in a range of 1.3581 to 1.3616
Canada39;s annual inflation rate slows to 2
Bond yields rise across the curve

TORONTO, Sept 17 Reuters The Canadian dollar edged lower against its U.S. counterpart on Tuesday as domestic inflation data suggested to some investors that the Bank of Canada could match a potential supersized interest rate cut by the Federal Reserve.

The loonie was trading 0.1 lower at 1.3595 per U.S. dollar, or 73.56 U.S. cents, after trading in a range of 1.3581 to 1.3616. The currency has been in a holding pattern since last Wednesday when it touched a threeweek low at 1.3622.

CAD39;s performance is hamstrung by market thinking that the BoC39;s policy outlook hinges to some extent on the Fed39;s at this point, Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

The U.S. dollar hovered near its lowest levels of the year against a basket of major currencies, a day before the expected start of a U.S. easing cycle that markets are wagering may begin with a halfpercentagepoint reduction in rates, rather than a quarterpoint move.

Canada39;s annual inflation rate slowed to 2 in August from 2.5 in July, matching the BoC39;s inflation target and marking the coolest pace since February 2021. Analysts had expected inflation to slow to 2.1.

The details of the August release provide further evidence that the inflation battle is almost won and will serve to increase speculation that…