Canada’s dollar fell for a second day as Federal Reserve Bank of St. Louis President James Bullard said the decision not to slow bond buying was a close call and “small� tapering is possible next month. The currency remained lower after Canada’s inflation rate slowed for the first time in four months in August, approaching the bottom of the central bank’s target band. The decision by Fed policy makers on Sept. 18 to hold back from paring the central bank’s $85 billion of monthly bond buying was “borderline,� Bullard said, amid data that showed a less-robust recovery. Chairman Ben S. Bernanke said the Fed would make the taper call based on “what’s needed for the economy.� “Expectations still remain that the Fed will taper quantitative easing, just at a later date,� Blake Jespersen, managing director of foreign exchange at Bank of Montreal, said by phone from Toronto. “We’ve seen a steady march higher for the U.S. dollar since the selloff. Given our close ties to the U.S., and the price of oil right now, it bodes well for the Canadian dollar.� The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell 0.2 percent to C$1.0286 per U.S. dollar at 9:05 a.m in Toronto, paring gains this week to 0.6 percent. One loonie buys 97.22 U.S. cents. Canada’s inflation rate slowed in August from a year ago as the consumer price index rose 1.1 percent, following July’s 1.3 percent pace, Statistics Canada said from Ottawa. The core rate, which excludes eight volatile products, slowed to 1.3 percent from 1.4 percent. Futures on crude oil, the nation’s largest export, fell 0.8 percent to $105.56 per barrel in New York. The average price over the past year is $95.39. To contact the reporter on this story: Cecile Gutscher in London at cgutscher@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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