By Commodity News Service Canada
WINNIPEG, Dec. 19 – The Canadian dollar eased against the US dollar on Friday, reacting to disappointing Canadian inflation data, analysts said.
According to Statistics Canada, the Consumer Price Index (CPI) rose 2.0 per cent in the 12 months to November, below expectations of a 2.2 per cent rise.
The Canadian dollar closed at US$0.8615 or US$1=C$1.1608 on Friday, which compares with Thursday’s North American settlement of US$0.8623 or US$1=C$1.1597.
Ongoing worries that the recent drop in oil values will weigh on Canadian economic growth also undermined the Canadian dollar.
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However, crude oil values staged a rebound on Friday, which was helping to limit the loonie’s losses.
Further support came from positive domestic retail sales data. StatsCan said retail sales were relatively unchanged in October, while pre-report expectations called for a 0.2 per cent drop.
Canadian bonds closed higher on Friday, reacting to the disappointing Canadian CPI data released by Statistics Canada. Strength in the US Treasury market was also supportive, brokers said.
The two-year bond yielded 1.014% late Friday, from 1.020% late Thursday. The 10-year bond yielded 1.823%, from 1.866%. Bond yields fall as their prices rise.
