Canadian dollar dips but on track for 5th straight weekly gain

TORONTO: The Canadian dollar weakened against the greenback on Friday as investors awaited news on prospects for U.S. stimulus and domestic data showed some fading momentum for retail sales, with the loonie retreating from a 2-1/2-year high earlier this week.

Canadian retail sales grew by 0.4pc in October, surpassing estimates for a 0.2pc increase, data from Statistics Canada showed.

It was the sixth straight monthly gain but a flash estimate showed that sales in November were relatively unchanged.

"Momentum in Canadian retail sales proved resilient in October, but that strength seems to have faded in November," Royce Mendes, a senior economist at CIBC Capital Markets, said in a note.

The U.S. dollar consolidated losses after a week of declines that pushed it to its lowest in two and a half years, while global shares were mixed, with investors still on edge over a Brexit trade deal and U.S. coronavirus relief package.

Canada sends about 75pc of its exports to the United States, including oil, which headed for a seventh weekly gain in a row as investors focused on the rollout of COVID-19 vaccines and looked past rising case numbers and tighter lockdowns in Europe.

U.S. crude prices were up 0.8pc at $48.75 a barrel.

The Canadian dollar was trading 0.2pc lower at 1.2750 to the greenback, or 78.43 U.S. cents, having traded in a range of 1.2716 to 1.2764. On Tuesday, the currency touched its strongest since April 2018 at 1.2684.

For the week, the loonie was on track to gain 0.2pc, which would be its fifth consecutive advance. It has climbed 1.9pc since the start of the year but that is much less than some other G10 currencies.

Canadian government bond yields were mixed across a flatter curve on Friday, with the 10-year down 1.3 basis points at 0.730pc.