The Canadian dollar tumbled Friday to its lowest level in a year Friday as the U.S. dollar continued to appreciate and traders digested data on retail sales and inflation.The loonie was down for a sixth session, falling 0.88 to 95.52 cents US as Statistics Canada said that the annual inflation rate rose to 0.7% in May while core inflation was stable at 1.1%, both below expectations.Inflation was up 0.2% in May compared with April. The consensus estimate had been for a month-month increase of 0.4% and a year-year increase of 0.9%.April’s headline inflation rate had been an extremely low 0.4% and core inflation was 1.1%, which is at the low end of the Bank of Canada’s target range of between 1.0 and 3.0%.Canadian retail sales edged up a weaker than expected 0.1% to $39.5-billion in April, following flat sales in March. Statistics Canada said that stronger sales at motor vehicle and parts dealers were offset by weaker sales at gasoline stations. Economists had expected sales to rise by 0.2%.The dollar has lost about 2.5 cents since June 13. It has particularly suffered by indications that the U.S. Federal Reserve is likely to start winding up monetary stimulus later this year. Fed chairman Ben Bernanke said Wednesday that the Fed will slow down its bond purchases this year and end in 2014.Investors have got used to central banks flooding the financial markets with stimulus since the 2008 financial collapse and subsequent recession.The Fed’s purchase of US$85-billion a month in bonds has kept long-term rates low and also helped fuel a strong rally on stock markets, the resource heavy TSX being an exception.The Fed’s signal about tapering bond purchases has sent the U.S. dollar and bond yields sharply higher this week.The yield on the U.S. benchmark 10-year bond hovered around 2.4% Friday morning, up from about 2.25% before Bernanke made his announcement Wednesday afternoon. The yield was as low as 1.6% in early May.Commodity futures also started to bounce back from a severe mauling. Prices fell heavily Thursday, partly because of demand concerns that arose from a weak reading on Chinese manufacturing but also because of the appreciating greenback.A higher U.S. dollar pressures commodities because a stronger greenback makes it more expensive for holders of other currencies to buy oil and metals, which are dollar-denominated.The July crude contract on the New York Mercantile Exchange rose 35 cents to US$95.75 a barrel.July copper edged up one cent to US$3.08 a pound and gold climbed $3 to US$1,289.20 an ounce after tumbling $88 to a 2 1/2 year low. read more