Canada’s dollar was little changed versus its U.S. counterpart amid declining equities prices after a report showed retail sales growth slowed in November, highlighting the risks to the economy of indebted consumers.
The Canadian currency performed worse than 10 of its 16 most traded counterparts against the U.S. dollar as crude oil, the nation’s largest export, slid. Bank of Canada Governor Mark Carney has decried Canada’s reliance on “debt-fueled household expenditures” as consumer leverage reaches record levels, threatening the nation’s economic momentum.
“This reaffirms Carney’s concerns,” said Dean Popplewell, head analyst in Toronto at the online-currency trading firm Oanda Corp., in a telephone interview referring to the retail sales report. “These are opportunities to sell the Canadian dollar. Risk-aversion trades are very much favored.”
The currency, nicknamed the loonie, depreciated 0.01 percent to C$1.0090 per U.S. dollar at 5 p.m. Toronto time. It dropped as much as 0.6 percent, the most on an intraday basis since Jan. 13. One Canadian dollar buys 99.10 U.S. cents.
Retail sales rose 0.3 percent to C$38.7 billion ($38.3 billion) in November, compared with a revised 0.9 percent increase in October, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast a 0.2 percent increase based on the median of 24 responses.
Carney is relying on consumers to contribute just more than half of the country’s 2 percent economic growth rate this year, with exports slowed by Europe’s debt crisis and a strong currency. Household debt will also set new highs after reaching 153 percent of disposable income in the third quarter, the central bank predicted last week.