The Canadian dollar weakened against its U.S. counterpart on Tuesday as domestic inflation data supported the recent decision by the Bank of Canada to suspend interest rate hikes.

Canada's annual inflation rate slowed more than expected to 5.2%, its lowest level in 13 months.

In March, the Bank of Canada left its benchmark interest rate unchanged at 4.50%, becoming the first major central bank to halt the hike.

Since then, the turmoil in the global banking sector has increased pressure on other central banks to roll back tightening.

On Wednesday, the Fed is due to make its decision on interest rate.

The Canadian dollar fell 0.4% against the U.S. currency.

The price of oil, one of Canada's main exports, continued its recovery from a recent 15-month low. Oil futures in the U.S. rose 2.5% to $69.65 per barrel.

Canadian government bond yields were higher across the curve, tracking the movement of U.S. Treasuries.

The 2-year bond rose 9.5 basis points to 3.712% but traded 15.6 basis points below its U.S. equivalent, a gap of about 46 basis points.