June 21, 2019 / 7:37 PM / 5 months ago

CANADA FX DEBT-C$ trims this week's rally as retail sales miss estimates

 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar falls 0.1% vs greenback; up 1.5% for week
    * Canadian retail sales rise 0.1% in April
    * Price of U.S. oil increases 0.6%
    * Canadian bond prices decline across the yield curve

    By Fergal Smith
    TORONTO, June 21 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Friday after notching a
three-month high the day before, as a smaller-than-expected gain
for domestic retail sales in April sparked some profit taking by
investors.
    At 3:17 p.m. (1917 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3210 to the greenback, or 75.70 U.S.
cents. The currency, which on Thursday touched its strongest
intraday level in more than three months at 1.3151, traded in a
range of 1.3163 to 1.3229.
    Canadian retail sales grew by 0.1% in April from March, led
by higher sales at gasoline stations, Statistics Canada said.
The April increase was less than the 0.2% advance that analysts
had expected, although March's already large gain was revised
higher to 1.3%.             
    "It came a little bit weaker than expected," said Tony
Valente, a senior FX dealer at AscendantFX. "Being on a Friday,
it was a chance to take profit after a really good run." 
    The loonie was up 1.5% for the week, boosted by a rally in
the price of oil, one of Canada's major exports, data showing a
seven-month high for Canada's annual rate of inflation and the
prospect of Federal Reserve interest rate cuts.    
    "If you look at where we are in central banking, Canada and
Norway are the only two countries right now that aren't even
thinking about cutting rates," Valente said.
    Last month, the Bank of Canada left its benchmark interest
rate unchanged at 1.75% and said there was evidence that the
slowdown in the domestic economy was temporary.                 
    Oil added to this week's gains on fears the United States
could attack Iran and disrupt flows from the Middle East, which
provides more than a fifth of the world's oil output. U.S. crude
oil futures        settled 0.6% higher at $57.43 a barrel.
            
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries, with the two-year
           down 2 Canadian cents to yield 1.431% and the 10-year
            falling 15 Canadian cents to yield 1.482%.
    On Tuesday, the 10-year touched its lowest intraday yield in
two years at 1.383%.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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