TORONTO: The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Friday as domestic data showed retail sales falling less than expected in November and ahead of a Bank of Canada interest rate decision next week.
Canadian retail sales edged down by 0.1% in November from October on lower sales at food and beverage stores, as well as building material and garden equipment and supply dealers, Statistics Canada said.
Economists had forecast a larger decline of 0.5%, while a flash estimate showed sales rising by 0.5% in December.
The U.S. dollar climbed against a basket of major currencies after dovish comments by the governor of the Bank of Japan pressured the yen.
The price of oil was up 0.5% at $80.75 a barrel, supported by brightening economic prospects for China. Oil is one of Canada’s major exports.
The Canadian dollar was trading nearly unchanged at 1.3465 to the greenback, or 74.27 U.S. cents, after trading in a range of 1.3443 to 1.3497.
For the week, the currency was on track to decline 0.5% as investor sentiment turned more cautious and domestic data showed the annual inflation rate easing more than expected in December. It gained ground in the previous four weeks.
The Bank of Canada will hike its key interest rate by a quarter of a percentage point to 4.50% next Wednesday and then hit pause on an aggressive tightening campaign, according to a Reuters poll of economists, with risks skewed toward a higher peak.
Money markets see a roughly 70% chance the central bank will tighten further next week.
Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries.
The 10-year rose 8.2 basis points to 2.830% after touching on Thursday a five-month low intraday at 2.701%.
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