Loonie higher on U.S. data

Wed Feb 13, 2008 9:31am EST
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By John McCrank

TORONTO (Reuters) - The Canadian dollar rose against the U.S. dollar on Wednesday, after U.S. retail data came in stronger than expected, showing that fears of a recession have not yet caused consumers in Canada's biggest trading partner to close their wallets completely.

Domestic bond prices, with the lack of any key domestic data to influence direction, moved lower along with the bigger U.S. Treasuries market after the U.S. data.

At 8:58 a.m. EST, the Canadian dollar was at US$1.0026, valuing a U.S. dollar at 99.74 Canadian cents, up from 99.90 U.S. cents, valuing a greenback at C$1.0010, at Tuesday's close.

U.S. retail sales unexpectedly rose 0.3 percent in January, due in part to stronger sales of new cars and gasoline.

January's sales increase followed a 0.4 percent decline in December and was contrary to Wall Street analysts' forecasts for a 0.2 percent decline.

"There were widespread expectations for a very poor outcome here," said Eric Lascelles, chief economics and rates strategist at TD Economics.

"We thought that same store sales would have been very soft in January with the cold weather and reluctance to spend gift cards holding things back, but it turns out that nope, they didn't too much."

The next key U.S. report investors will look to for a clearer picture of where the U.S. economy is at will be the U.S. international trade data due on Thursday.   Continued...