Canadian Dollar Drops as Inflation Slows More Than Forecast, Retail Stalls

Canadian Dollar

As reported by Bloomberg’s Chris Fournier :

Canada’s dollar dropped for the first time in four days after government reports showed inflation slowed more than economists forecast and retail sales unexpectedly stalled.

The loonie, as the Canadian currency is known for the image of the aquatic bird on the C$1 coin, was headed for a third weekly drop in what would be the longest losing streak this year on reduced speculation that the Bank of Canada will resume boosting borrowing costs. The Canadian dollar dropped against most of its major counterparts including the yen and pound.

“The risks are primarily tilted for a weaker Canadian dollar,” said John Shin, senior G-10 foreign-exchange strategist at Bank of America Merrill Lynch in New York. “Unless you got some type of substantial reversal back upward in oil prices, this is where we think you get into a longer-term softening period for the Canadian dollar.”

Canada’s currency depreciated 0.4 percent to 97.10 cents versus the U.S. dollar at 2:20 p.m. in Toronto, from 96.76 cents yesterday. One Canadian dollar buys $1.0299. The Canadian dollar rallied on April 29 to 94.46 cents, the strongest since November 2007. The loonie has fallen 0.2 percent this week.

The consumer price index increased 0.3 percent in April after a 1.1 percent gain in the previous month, Statistics Canada reported today. The median forecast of 27 economists in a Bloomberg News survey was for a 0.5 percent advance.

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