Canadian Dollar Falls to Six-Week Low as Retail Sales Declineby
The Canadian dollar reached the weakest level in six weeks as a report showed retail sales in March fell more the forecast.
The currency weakened against most of its major peers as sales declined 1 percent, compared with a median forecast for a 0.6 percent decline among 20 economists surveyed by Bloomberg. A separate report showed Canada’s inflation rate accelerated for the first time in three months in April on higher food costs and reduced drag from gasoline.
"Retail sales disappointed, adding to the recent tone of soft Canadian data surprises," said Mark McCormick, North American head of foreign-exchange strategy in Toronto at Toronto Dominion Bank. "Dollar-Canada is going to continue to push higher, given the repricing of Fed risks, the overextended long Canadian-dollar positions and softer data."
Softer economic data from retail sales to jobs growth pared the currency’s gain this year to 5.6 percent. The rally, bolstered by a rebound in crude oil prices, has lifted the loonie from a 13-year low reached in January.
The loonie, as the Canadian dollar is known, was little changed at C$1.3101 per U.S. dollar as of 8:53 a.m. in Toronto. One loonie buys 76.33 U.S. cents.
Hedge funds and other large speculators started betting in the Canadian dollar’s favor last month, ending their longest sustained bearish stance since 2001, according to data from the Commodity Futures Trading Commission. Bulls outnumbered the bears for six weeks in a row, with bullish bets accumulating each week, the data show.
The Canadian dollar will weaken to C$1.32 by the end of the year, according to forecasts compiled by Bloomberg.