Loonie Falls As Canada Inflation Slows

The Canadian dollar was lower against its key counterparts in the New York session on Wednesday, as a data showed that nation's consumer inflation slowed in November from last month.

Data from Statistics Canada showed that the CPI rose 0.3 percent on a seasonally adjusted monthly basis in November, after rising 0.6 percent in the previous month.

Core CPI, excluding food and energy, grew 0.1 percent in November, following a 0.2 percent rise in October.

The CPI rose 4.7 percent on a year-over-year basis in November, same as seen in October and matched expectations.

The U.S. Federal Reserve ends its two-day policy meeting later today, with investors expecting a faster tapering of its bond buying program to tackle price pressures.

The central bank will also release economic and interest rate projections, and expectations are that the so-called dot plot could point to one or two hikes in 2022.

The loonie depreciated to near a 4-month low of 1.2897 against the greenback and a fresh 4-week low of 0.9208 against the aussie, from its prior highs of 1.2845 and 0.9126, respectively. The loonie is seen finding support around 1.30 against the greenback and 0.94 against the aussie.

The loonie fell to near a 2-week low of 1.4531 against the euro, compared to yesterday's close of 1.4477. The loonie is likely to test support around the 1.47 region.

The loonie dropped to a 9-day low of 88.13 against the yen from yesterday's close of 88.39. The loonie may face support around the 86.00 mark.

Looking ahead, the Fed announces its decision on interest rate at 2:00 pm ET. Economists widely expect the federal funds rate to be kept at 0-0.25 percent.