TORONTO: The Canadian dollar ended stronger against its US counterpart on Monday on a greenback retreat in light trade, as investors responded to a dearth of news by pulling back on long US positions.
"There were fairly thin flows in a market that was biased to sell the US dollar all day long," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
"Now we await from a domestic perspective the only data print (this week), which will be retail sales tomorrow morning, expected to rebound, which could create some selling in dollar-Canada," he said, pointing to C$1.0260 if the retail numbers surprise to the positive.
Retail sales are forecast to have risen 0.4 percent in May from April, helped by higher gasoline prices, with sales excluding autos seen up 0.3 percent.
The Canadian dollar ended the session trading at C$1.0344 to the greenback, or 96.67 US cents, compared with C$1.0367, or 96.46 US cents, at Friday's North American close.
The US dollar in recent weeks has gained broadly as yields spiked in anticipation of a reduction in monetary stimulus, with the Canadian currency managing to stick with the greenback and gain against some other currencies.
"Canada's had a decent little run. When the (US) dollar was really rallying it hung in there quite well," said Darcy Browne, managing director of foreign exchange sales at CIBC World Markets.
"Overall, the Canadian dollar still stands to benefit from its proximity to the US, (but) it's a low-beta currency in good times and bad times."
The Japanese yen gained against both North American currencies after the country's prime minister won a decisive electoral victory that could herald more political stability.
Browne said trade in the loonie, as the Canadian currency is colloquially known, would likely remain subdued all week given a dearth of data releases, excluding the retail sales on Tuesday.
"I would imagine we're just going to be on the ebbs and flows of risk and dollar-mania throughout the course of the week," he said.
The price of Canadian government debt was mixed across the curve, with the two-year bond off half a Canadian cent to yield 1.089 percent and the benchmark 10-year bond rising 5 Canadian cents to yield 2.355 percent.
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