Canadian dollar ends lower after retail sales data

Fri Feb 22, 2008 5:14pm EST
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By Frank Pingue

TORONTO (Reuters) - The Canadian dollar ended lower against the U.S. dollar on Friday en route to a third straight weekly decline after data showed Canadian retail sales outside the auto sector disappointed in December.

Canadian bond prices ended lower across the curve, handing back some of the gains made earlier in the week as investors focused more on the overall rise in December retail sales.

The Canadian dollar closed at C$1.0130 to the U.S. dollar, or 98.72 U.S. cents, down from C$1.0013 to the U.S. dollar, or 99.87 U.S. cents, at Thursday close.

Retail sales rose a softer-than-expected 0.6 percent in December, but outside the auto sector sales fell for the first time in five months, down 0.4 percent, compared with estimates calling for a 0.4 percent rise.

The Canadian dollar fell right after the report and was not able to rebound, eventually hitting a session low of C$1.0168 to the U.S. dollar, or 98.35 U.S. cents, during the last half of the North American session.

"It seems to me the currency is sort of latching on to bad news these days and it seems to be paying a lot more attention to the bad news than the good news," said Doug Porter, deputy chief economist at BMO Capital Markets.

"Even though in real terms it was a solid gain for the month for overall sales, the market seemed to focus on that decline in ex-auto sales and it was just another in a long string of bad news for the economy in December."

For the week, the Canadian dollar ended down 0.5 percent but remained stuck in the range it has occupied for several weeks now, hovering around parity versus its U.S. counterpart.   Continued...