July 23 (Bloomberg) -- Canada's dollar fell versus its U.S. counterpart as a government report showed the annual inflation rate slowed in June, reducing pressure on the Bank of Canada to raise interest rates later this year. "Probably suggests some marginal weakness" in the Canadian dollar, Sebastien Galy, a currency strategist in New York at BNP Paribas, said by phone from New York, referring to the effect of the report on the Canadian currency. "Commodities also underperformed a little bit." The currency, nicknamed the loonie for the aquatic bird on the one-dollar coin, depreciated 0.2 percent to C$1.0396 per U.S. dollar at 7:37 a.m. in Toronto, compared with C$1.0371 yesterday. One loonie buys 96.19 U.S. cents. The consumer price index rose 1 percent in June, the slowest in seven months, after a 1.4 percent gain in May, Statistics Canada said today. The core rate that excludes eight volatile items slowed to 1.7 percent from 1.8 percent. Economists forecast the inflation rate would be 1 percent and the core rate 1.9 percent, according to the median of 18 estimates in a Bloomberg News survey. "The market is more concerned about downside risks to growth and by extension with downside risks to inflation," Matthew Strauss, a senior currency strategist at Royal Bank of Canada, said by phone from Toronto before the report was released. "Canada is not an island and is impacted by this general concern and uncertainty about the global outlook." Crude for September delivery dropped as much as 0.6 percent to $78.79 a barrel in electronic trading on the New York Mercantile Exchange.

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