News Column

Canadian dollar moves lower as March retail sales miss expectations

May 22, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Canadian dollar was lower Thursday amid a worse than expected showing in retail sales during March.

The loonie was down 0.04 of a cent to 91.58 cents US as Statistics Canada reported that sales actually fell 0.1 per cent in March to $41.1 billion, led by a decrease in the motor vehicle segment. Economists had expected a gain of 0.3 per cent.

The agency said that motor vehicle and parts dealers contributed the most in dollar terms to the decrease in overall retail sales during March, with sales declining 0.7 per cent.

On Friday, markets will look to the latest Canadian inflation data and in turn what effect the reading could have on the Bank of Canada's interest rate announcement in early June.

Economists expect the inflation data will show that the consumer price index rose two per cent year-over-year during April, up from the 1.5 per cent reading registered in the previous month.

Meanwhile, China’s manufacturing contraction eased in May, as HSBC’s preliminary purchasing managers’ index rose to 49.7 in May from 48.1 in April. Numbers above 50 on the 100-point scale indicate expansion.

The HSBC reading follows a similar survey by an official group that has also been showing signs of a rebound in China, with factory activity growing weakly in April.

Analysts say that the improvements in both surveys suggest the Chinese government’s targeted measures to support the economy are moderating the pace of the slowdown.

On the commodity markets, copper prices rose in the wake of the Chinese manufacturing data with the July contract up one cent to US$3.14 a pound.

June bullion gained $13.10 to US$1,301.20 an ounce.

July crude slipped 21 cents to US$103.86 a barrel.

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Source: Canadian Press DataFile

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