TORONTO: The Canadian dollar weakened against its US counterpart on Thursday, pulling back from an earlier 10-day high, after domestic data showed retail sales rose far less than expected in September.
The 0.1 percent increase was short of economists' forecasts for a gain of 0.9 percent, while volumes fared worse, declining by 0.6 percent.
The data is negative for the Canadian dollar and positive for the front end of Canada's yield curve, "which still has some work to do in pricing out a January hike," Nick Exarhos, an economist at CIBC Capital Markets, wrote in a research note.
The Bank of Canada raised interest rates in July and September for the first time in seven years but has since turned more cautious about the outlook for the domestic economy.
Chances of another hike by the bank's January meeting dipped to 31 percent from 34 percent before the data, the overnight index swaps market indicated.
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