CANADA FX DEBT-C$ off low, bonds fall after US retail data

Thu Mar 12, 2009 10:16am EDT
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* C$ weakens but off low after U.S. retail report

* Bonds fall on better than expected U.S. retail numbers

* Market focus on Friday's Canadian trade, employment data

TORONTO, March 12 (Reuters) - The Canadian dollar weakened against the U.S. dollar on Thursday morning but moved off session lows after a better-than-expected U.S. retail sales report improved market confidence.

Total U.S. retail sales eased 0.1 percent in February after rising by a revised 1.8 percent in January, previously reported as a 1.0 percent increase. Excluding motor vehicles and parts, sales increased 0.7 percent in February. [ID:nN11282880]

Analysts polled by Reuters had forecast February retail sales would fall by 0.5 percent. Excluding motor vehicles, the forecast was for a 0.2 percent fall.

At 9:45 a.m. (1345 GMT), the currency was at C$1.2890 to the U.S. dollar, or 77.58 U.S. cents, down from C$1.2862 to the U.S. dollar, or 77.75 U.S. cents, at Wednesday's close.

Overnight, the Canadian dollar pushed as low as C$1.2957 to the U.S. dollar, or 77.18 U.S. cents, but recovered as the price of oil headed nearly 3 percent higher to above $43 a barrel. Oil is a key Canadian export and the Canadian currency often tracks its movements.

"The Canadian dollar has had a few big swings in the past 24 hours but on net it hasn't changed a lot. It started today on a weak footing but it made a comeback after the better than expected U.S. retail sales report," said Doug Porter, deputy chief economist at BMO Capital Markets.   Continued...