Canada’s dollar dropped from almost a three-year high after a government report showed the inflation rate slowed in June more than forecast. The loonie, as the currency is also known, pared its weekly gain versus the greenback as the report discouraged speculation that the Bank of Canada will resume increasing borrowing costs. The central bank raised its inflation forecast for the next nine months this week. “Every aspect of the release was a big miss in light of the market’s expectation that core inflationary pressures were rising, dovetailing with the bank’s guidance provided earlier this week,” Jack Spitz, managing director of foreign exchange at National Bank of Canada, said by phone from Toronto “We’re already seeing it in terms of the Canadian dollar.” The Canadian dollar slid for the first time in four days, depreciating 0.6 percent to 94.88 cents versus the greenback at 7:18 a.m. in Toronto, from 94.33 cents yesterday, when it touched 94.23 cents, the strongest level since November 2007. One Canadian dollar buys $1.0544. Consumer prices advanced 3.1 percent in June from a year earlier after a 3.7 percent gain in the previous month, Statistics Canada said today in Ottawa. The median forecast of 24 economists in a Bloomberg News survey was for a 3.6 percent rate of increase. The Bank of Canada has held the target rate for overnight lending between commercial banks at 1 percent since September after raising it three times in 2010. To contact the reporter on this story: Chris Fournier in Halifax at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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