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Loonie edges down after inflation rises more than expected

Canadian dollars.


The Canadian dollar ended relatively unchanged on Wednesday as the latest inflation numbers showed the largest monthly increase in consumer prices in more than 20 years.

The loonie was down 0.01 of a cent (U.S.) to 98.38 cents, after rising as much as 0.13 of a cent in the morning.

The latest data from Statistics Canada showed that the annual inflation rate in February jumped more than expected to 1.2 per cent from 0.5 per cent a month earlier.

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Economists had expected a gain of 0.8 per cent.

"While today's figures are much stronger than expected, they still track a pace that should raise little worry for the Bank of Canada — and still point to continued slack in the economy," CIBC economist Emanuella Enenajor said in a note.

Concerns about the future of Europe's economy were also affecting the value of the euro.

Europe's main currency fell after efforts to form a coalition government in Italy were abandoned by centre-left leader Pier Luigi Bersani. Meanwhile, Cyprus worked to iron out the final details to reopen its banks on Thursday after a nearly two-week closure as it struggled to come up with a bailout agreement.

The euro ended down 0.88 of a cent (U.S.) to $1.2773, according to the Bank of Montreal.

In commodities, June bullion rose $9.90 to $1,607.20 an ounce, as the TSX gold sector moved higher. May copper was unchanged at $3.44 a pound.

The May crude contract on the New York Mercantile Exchange rose 24 cents to $96.58 a barrel.

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