* Canadian dollar strengthens 0.3% against the greenback
* For the week, the loonie weakens 0.2%
* Retail sales fall 0.2% in November
* Canadian bond yields rise across the curve
TORONTO, Jan 19 (Reuters) – The Canadian dollar
strengthened against its U.S. counterpart on Friday, clawing
back much of this week’s decline, as an increase in investor
risk appetite offset domestic data showing a surprise decline in
retail sales.
The loonie was trading 0.3% higher at 1.3440 to the
greenback, or 74.40 U.S. cents, after trading in a range of
1.3437 to 1.3502.
The move higher for the Canadian currency came as the U.S.
dollar gave back some of its recent rally against a basket of
major currencies and the S&P 500 notched an intraday
record high for the first time in two years.
Canada is a major producer of commodities, such as oil, so
the loonie tends to be sensitive to shifts in risk appetite.
“You definitely have some risk-on tailwinds,” said Michael
Goshko, senior market analyst at Convera Canada ULC. “U.S.
dollar strength has just faded throughout the day.”
The Canadian dollar has recovered some ground after it hit
on Wednesday a five-week low at 1.3541. For the week, it was
down 0.2%, its third straight weekly decline.
Canadian retail sales fell 0.2% in November from October,
falling short of estimates for a flat reading, although initial
estimates suggested a rebound in December.
The Bank of Canada is due to make an interest rate decision
on Wednesday. The central bank will wait until at least June to
cut its key interest rate as price pressures remain sticky,
according to a Reuters poll.
The price of oil, one of Canada’s major exports,
settled 0.9% lower at $73.41 a barrel but still posted a weekly
gain, supported by Middle East tensions.
Canadian government bond yields rose across the curve. The
10-year was up nearly 1 basis point at 3.502% after
earlier touching its highest level since Dec. 1 at 3.536%.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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