By Chris Fournier Sept. 17 (Bloomberg) -- Canada’s dollar remained higher versus its U.S. counterpart after a government report showed consumer prices were unexpectedly flat last month. “These inflation numbers are par for the course,’’ said Eric Lascelles, chief economics and rates strategist in Toronto at TD Securities Inc., a unit of Canada’s second-biggest bank. “They show relatively soft price pressures and yet not a state of deflation. The Canadian dollar will remain fairly stable in response to this one.’’ The Canadian currency, nicknamed the loonie, increased 0.3 percent to C$1.0630 per U.S. dollar at 7:14 a.m. in Toronto, from C$1.0659 yesterday. The consumer price index was unchanged in August, Statistics Canada said today in Ottawa. The median forecast of 20 economists in a Bloomberg News survey was for the measure to to rise 0.1 percent from July. The loonie appreciated 15 percent against the U.S. dollar this year after losing a record 18 percent in 2008. Its strength is creating “headwinds” that threaten the nation’s economic recovery, Bank of Canada Deputy Governor John Murray said on Sept. 15 in Berlin. A stronger Canadian dollar makes the nation’s exports more expensive. Bank of Canada policy makers held the benchmark interest rate at a record low of 0.25 percent last week and reiterated a pledge to keep it there through June 2010 unless the inflation outlook shifts. They are next scheduled to meet on interest rates on Oct. 20.

Source