CANADA FX DEBT-Canadian dollar weakens on retail sales data

Mon Feb 23, 2009 12:25pm EST
 
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* Canadian dollar weakens after early rise

* Bonds mostly higher across the curve

* Canada retail sales drop more than expected

* (Adds details, quote)

TORONTO, Feb 23 (Reuters) - The Canadian dollar weakened versus the U.S. dollar late on Monday morning, hit by data that showed a big drop in December retail sales.

Canadian retail sales tumbled 5.4 percent in December, the biggest monthly drop since 1991 and more than twice what was expected. [ID:nN23330217]

"What takes precedence is the dismal retail sales numbers that we got this morning," said Charmaine Buskas, senior economics strategist, TD Securities.

"They definitely confirm that the Canadian economy is under a lot of pressure and it certainly assures the markets that another rate cut is coming from the Bank of Canada."

The data put more pressure on the central bank to cut its key overnight rate by another half-point on March 3 to 0.50 percent. [ID:nN23330217]   Continued...