The Canadian dollar tumbled today versus the US currency as the report about the slower pace of the Canadian inflation growth caused the investors to reduce bets on the increase of the interest rates by Canada’s central bank.

The core Consumer Price Index (excluding eight of the most volatile components) fell 0.1 percent in July, while the growth was predicted by the analysts. The Canadian currency was also weakened by the risk aversion sentiment among the investors, spurred by the signs of the slower economic growth in the US. The inflation report and the bad news from the US decreased the probability that the Bank of Canada will perform another rates hike.

As Camilla Sutton, the director of the currency strategy at the Bank of Nova Scotia, expressed it:

Today’s inflation release is negative for the Canadian dollar. The second key risk for the Canadian dollar is that the pace of both the US and global recovery is weaker than the already soft recovery priced in.

USD/CAD surged to 1.0498 from the opening level of 1.0401 today as of 17:43 GMT. EUR/CAD currency pair traded near its opening level of 1.3335.

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