TORONTO: The Canadian dollar weakened to a 14-month low against its US counterpart on Friday, weighed by recent oil price declines and after domestic retail sales data pointed to subdued underlying demand.
The loonie was trading 0.3 percent lower at 1.4180 per US dollar, or 70.52 US cents, heading for its seventh straight daily decline. The currency touched its weakest intraday level since April last year at 1.4183. For the week, it was down 1.3 percent as the US Federal Reserve’s hawkish message led to broad-based gains for the US dollar.
Canada’s retail sales grew by 0.5 percent in April from March but core sales, which exclude gasoline stations, fuel vendors, and motor vehicle and parts dealers, were down for a second straight month, falling 0.7 percent. A preliminary estimate showed sales up 1 percent in May.
“April’s report suggests that inflation continued to support nominal retail sales, while underlying demand remained subdued,” Maria Solovieva, an economist at TD Economics, said in a note.
“With higher energy prices weighing on purchasing power through much of the quarter, we expect consumer spending growth to moderate to a +0.5 percent q/q (quarter-over-quarter) annualized pace in Q2, following the more robust +1.5 percent recorded in Q1,” Solovieva said.
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