TORONTO: The Canadian dollar firmed against the US dollar on Tuesday, as Canadian retail sales growth came in stronger than expected and US oil prices rose moderately.
The currency's gains were initially capped as the US dollar firmed after data showed US economic growth was far stronger than initially thought in the third quarter.
In Canada, a surge in the auto sector helped retail sales power ahead by 0.8 percent in September, which could prompt forecasters to boost their projections for gross domestic product (GDP), due on Friday.
Statistics Canada has already reported strong manufacturing, wholesale, export and building permits data for September, and retail sales was the last key piece of economic data ahead of Friday's GDP.
At 9:45 a.m. (1445 GMT), the Canadian dollar was at C$1.1247 to the greenback, or 88.91 US cents, stronger than Monday's close of C$1.1289, or 88.58 US cents.
US crude was higher, while Brent crude was steady around $80 a barrel ahead of an OPEC meeting this week that will decide on production levels for next year. Oil prices have fallen by nearly a third since June and are far below what many OPEC members and rival producers need to balance their budgets.
Martin Schwerdtfeger, a currency strategist at TD Securities said the Canadian dollar, which was outperforming other major currencies, was unlikely to make a big move ahead of other events later in the week.
The biggest drivers will be Thursday's OPEC meeting and Friday's domestic GDP data for the third quarter and September.
"Those are going to be the key events. But we have to keep in mind that is going to be happening in an environment with less liquidity because of the US (Thanksgiving) holiday," said Schwerdtfeger, noting that it will heighten the risk of more volatility.
Canadian government bond prices were mixed across the maturity curve, with the two-year down 1 Canadian cent, yielding 1.062 percent and the benchmark 10-year flat, yielding 1.981 percent.
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