Canadian Dollar Gains as Retail Sales Rise More Than Forecast
June 21 (Bloomberg)
Canada's dollar rose for the fifth day in sixth against the U.S. dollar after a government report showed retail sales in April rose more than forecast.
The report fueled speculation the Bank of Canada will raise its target interest-rate this year. The currency last week had its largest weekly gain since March after central bank Governor David Dodge said interest rates will rise ``over time.''
``We like the Canadian dollar,'' said Nick Bennenbroek, currency strategist at Brown Brothers Harriman & Co. in New York. ``Domestic demand is very supportive. The Bank of Canada will start hiking rates pretty soon.''
The Canadian dollar increased to 81.13 U.S. cents in Toronto as of 10:25 a.m. from 80.95 late yesterday. The currency was higher versus 12 of 16 primary currencies tracked by Bloomberg. One U.S. dollar buys C$1.2326.
Retail sales grew by 1.5 percent in April, after expanding by 0.1 percent a month earlier. An increase of 0.6 percent was expected, based on the median forecast of 20 economists in a Bloomberg News survey. Sales excluding autos climbed 0.8 percent, above the average of 0.2 percent the past 12 months.
``The need for the Bank of Canada to continue shepherding Canada businesses has largely dissipated,'' Stewart Hall, a strategist at HSBC Securities Canada Inc. in Toronto, wrote in a report to clients. ``Not unlike inflation, the consumer genie once released can prove difficult to bottle back up.''
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