Loonie Hits Two-Month Low Amid Disappointing Retail Sales and Fed Bets
The Canadian dollar has hit a two-month low against its US counterpart as retail sales data failed to lift investor concern about Canada's economic outlook. The loonie was trading 0.2% lower at 1.4125 per US dollar, or 70.80 US cents, after touching its weakest intraday level since July 14 at 1.4149.
Tony Valente, a senior FX dealer at AscendantFX, attributed the loonie's slide to 'rates-and-USD story' rather than a sudden Canada-specific shock. The US dollar (.DXY) rose to a two-month high against a basket of major currencies as investors bet on additional Federal Reserve interest rate hikes following recent strong economic data.
Canadian retail sales fell by 0.7% in July, led by declines at general merchandise retailers. A preliminary estimate showed sales rebounding by 1.3% in August but analysts don't expect to see sustained strength.