Canadian forex review: C$ drops below 90 cents us

By Commodity News Service Canada

WINNIPEG, Feb. 21 – The Canadian dollar moved lower, dropping below the 90 cents US mark on Friday amidst disappointing Canadian retail sales data, analysts said.

Canadian retail sales dropped 1.8 per cent on an annualized basis in January, much below expectations calling for just a 0.4 per cent drop, Statistics Canada reported. Unfavourable winter weather was behind the decline.

The Canadian dollar closed at US$0.8982 or US$1=C$1.1133 on Friday, which compares with Thursday’s North American settlement of US$0.9010 or US$=C$1.1099.

Losses seen in crude oil were also bearish for the loonie, though strength in gold limited the downside.

Better than expected Canadian inflation data was also supportive. StatsCan reported the consumer price index was up 1.5 per cent in January compared to the same time last year, beating expectations of a 1.3 per cent jump.

Canadian bonds were mixed on Friday, reacting to better than expected Canadian inflation data, and disappointing retail sales figures, traders said.

The two-year bond yielded 1.011% late Friday, from 1.003% late Thursday. The 10-year bond yielded 2.415%, from 2.439%. Bond yields fall as their prices rise.