Canadian Dollar Weakens as U.S. Retail Sales Drop, Stocks Fall

Tuesday, May 26, 2009

May 13 (Bloomberg) -- Canada’s dollar fell as North American stocks dropped after a government report showed U.S. retail sales unexpectedly declined in April for a second month.
The currency, known as the loonie, weakened 0.4 percent to C$1.1670 per U.S. dollar at 11:04 a.m. in Toronto, from C$1.1627 yesterday. The currency appreciated for the past six weeks. One Canadian dollar buys 85.69 U.S. cents.
“The Canadian dollar retraced some of its move,” said Camilla Sutton, a currency strategist at Scotia Capital Inc. in Toronto. “The U.S. consumer is not really there yet. We’re seeing some retracement of the excitement over global growth.”
The Standard & Poor’s 500 Index fell 1.9 percent.
U.S. retail sales decreased 0.4 percent last month after dropping a revised 1.3 percent in March, the Commerce Department reported in Washington. The median forecast of 68 economists surveyed by Bloomberg was for no change.
The yield on the 10-year Canadian government bond fell two basis points, or 0.02 percentage point, to 3.11 percent. The price of the 3.75 percent security maturing in June 2019 rose 17 cents to C$105.51.
The loonie will weaken to C$1.22 against the U.S. dollar by year-end, according to the median forecast in a Bloomberg survey of 40 economists


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