The loonie was down 0.01 of a cent to 98.38 cents, after rising as much as 0.13 of a cent in the morning.
The latest data from Statistics Canada showed that the annual inflation rate in February jumped more than expected to 1.2 per cent from 0.5 per cent a month earlier.
Economists had expected a gain of 0.8 per cent.
"While today's figures are much stronger than expected, they still track a pace that should raise little worry for the Bank of Canada — and still point to continued slack in the economy," CIBC economist Emanuella Enenajor said in a note.
Concerns about the future of Europe's economy were also affecting the value of the euro.
Europe's main currency fell after efforts to form a coalition government in Italy were abandoned by centre-left leader Pier Luigi Bersani. Meanwhile, Cyprus worked to iron out the final details to reopen its banks on Thursday after a nearly two-week closure as it struggled to come up with a bailout agreement.
The euro ended down 0.88 of a cent to US$1.2773, according to the Bank of Montreal.
In commodities, June bullion rose $9.90 to US$1,607.20 an ounce, as the TSX gold sector moved higher. May copper was unchanged at US$3.44 a pound.
The May crude contract on the New York Mercantile Exchange rose 24 cents to US$96.58 a barrel.