C$ holds near 6-week high as data adds to evidence of economic recovery

TORONTO: The Canadian dollar was little changed against its US counterpart on Wednesday, holding near its strongest level in almost six weeks as oil prices climbed and retail sales data added to evidence of recovery in the domestic economy.

Canadian retail sales rose 4.8% in February from January, surpassing estimates of a 4% gain, on higher sales at motor vehicle and parts dealers, as well as gasoline stations, data from Statistics Canada showed.

A flash estimate showed a 2.3% increase for March sales.

Oil, one of Canada's major exports, advanced as forecasts of a recovery in global fuel demand offset a surge in India's coronavirus cases and rising US crude inventories.

US crude prices were up 0.7% at $63.39 a barrel, while the Canadian dollar was nearly unchanged at 1.2391 to the greenback, or 80.70 US cents. It touched its strongest intraday level since March 18 at 1.2378.

The Bank of Canada is expecting strong consumption-led growth in the second half of the year as vaccinations against COVID-19 continue, Governor Tiff Macklem said on Tuesday.

Last week, the central bank signaled it could start hiking rates from their record lows in late 2022 and cut the pace of its bond purchases.

The Federal Reserve is not expected to be as hawkish as Canada's central bank at its policy announcement this afternoon. The decision is due at 2 p.m. ET (1800 GMT).

Canadian government bond yields were little changed across the curve, with the 10-year trading at 1.556%.