TORONTO _ The Canadian dollar headed higher Friday as the annual inflation rate was reported unchanged at 2.1 per cent in August.
The loonie was ahead 0.47 of a cent to 91.82 cents US.
Statistics Canada said the cost of living held steady last month, and was unchanged from July, when the federal agency's consumer price index also rose by 2.1 per cent over a 12-month period.
The figure was in line with what analysts were expecting.
The agency said prices were higher in all 12 categories it looks at, with shelter costs leading the way, up 2.8 per cent in August, down slightly from the 3.0 increase seen in July.
Core inflation, the number the Bank of Canada closely monitors and which excludes some items from the volatile energy and food categories, rose by 2.1 per cent, after an increase of 1.7 per cent in July.
``The recent global trend in inflation has been a slight disappointment and Canada's CPI was softer than expected in July,'' said Camilla Sutton, chief FX strategist and managing director at global banking and markets at Scotiabank.
``Currently markets are pricing in a 20 per cent chance of an interest rate hike in Canada over the next 12-months and today's CPI release will feed directly into both these expectations.''
The Canadian inflation data follows a vote by Scotland to stay with the United Kingdom and a statement by the U.S. Federal Reserve that it's in no hurry to raise its record-low interest rates.
Fifty-five per cent of Scots voted against independence, while 45 per cent voted in favour, providing relief for investors. The result avoids uncertainty in the U.K economy and markets over the future value of the pound and public debt, among other things.
Meanwhile, commodity markets were all lower, as the October crude contract on the New York Mercantile Exchange dropped 13 cents to US$92.94 a barrel. December gold bullion fell $1.80 to US$1,225.10 an ounce, while December copper gained a penny to US$3.10 a pound.
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