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Canadian dollar weakens 0.4% against greenback
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Canada's annual inflation rate eases to 5.9% in January
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Price of U.S. oil rises 0.8%
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Canadian bond yields rise across curve
TORONTO, Feb 21 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as investors dialed back bets on additional interest rate hikes by the Bank of Canada following softer-than-expected domestic inflation data. Canada's annual inflation rate eased to an annual rate of 5.9% in January from 6.3% in December, Statistics Canada data showed. Analysts had expected inflation to slow to 6.1%. Money markets now see a roughly 80% chance that the BoC will raise interest rates again this year after having fully discounted such a move before the data. Last month, the central bank signaled a pause in its tightening campaign after raising its benchmark rate to a 15-year high of 4.50%. The Canadian dollar was trading 0.4% lower at 1.35 to the greenback, or 74.07 U.S. cents, after moving in a range of 1.3442 to 1.3507. On Friday, the currency touched a six-week intraday low at 1.3537. The loonie fell as equity markets globally slumped and the U.S. dollar gained ground against a basket of major currencies. The price of oil , one of Canada's major exports, was up 0.8% at $76.97 a barrel. Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries and German Bunds following stronger-than-expected business activity data in the euro zone. The 10-year touched its highest level since Nov. 10 at 3.400% before dipping to 3.374%, up 8 basis points on the day. (Reporting by Fergal Smith; Editing by Paul Simao)
