By Fergal Smith TORONTO (Reuters) - The Canadian dollar strengthened for a second day against its U.S. counterpart on Tuesday as hotter-than-expected domestic inflation data spurred investors to reduce bets on another outsized interest rate cut from the Bank of Canada. Canada's annual inflation rate increased to 2.0% in October from 1.6% in September, eclipsing the 1.9% rate that economists had

The USD/CAD exchange rate rallied to its highest level since November 2020 after the Bank of Canada delivered another jumbo rate cut. It rose to 1.4247, up by almost 20% from its lowest level in 2020. The USD/CAD pair jumped after the BoC slashed interest rates by 0.50% last week, bringing the official cash rate to 3.25%. It has been the most aggressive central bank in slashing rates as it moved them from 5.5% earlier this year.