Canadian dollar steady following earlier losses on domestic data

Fri Jan 20, 2017 5:14pm EST
 
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By Solarina Ho

TORONTO (Reuters) - The Canadian dollar pared earlier losses following weaker-than-expected inflation and retail sales data, to finish little changed against its U.S. counterpart on Friday.

Canada's annual inflation rate rose to 1.5 percent in December from November's 1.2 percent, short of analysts' forecasts for an increase to 1.7 percent, while retail sales edged up 0.2 percent in November, just shy of expectations for an increase of 0.5 percent.

Markets were focused on the inauguration and speech by incoming U.S. president Donald Trump to see if he would give any indication on the new administration's policies.

"The market in general ... were anxiously awaiting any type of surprise comment during the inauguration speech. And when that didn't happen, for all intents the market feels as though it was ready to call it a week," said Brad Schruder, director, foreign exchange sales at BMO Capital Markets.

The Canadian dollar CAD=D4 ended at C$1.3327 to the greenback, or 75.04 U.S. cents, little changed from the Bank of Canada's official close of C$1.3314, or 75.11 U.S. cents.

The currency's strongest level of the session was C$1.3285, while its weakest level was C$1.3388. It has weakened roughly 2 Canadian cents, or 1.5 percent on the week.

Earlier in the week, the loonie, which had been trading near the C$1.30 level against the U.S. dollar, took a tumble after Bank of Canada Governor Stephen Poloz indicated that an interest rate cut was still possible.

Schruder noted that the Canadian dollar's swing this week from around C$1.30 to just below C$1.34 mirrored moves in mid October following comments from the Bank of Canada.   Continued...

 
Canadian Loonies, otherwise known as a one dollar coin, are displayed on top of an American currency in this posed photograph in Toronto, October 10, 2008. REUTERS/Mark Blinch