Canadian dollar drifts slightly lower U.S. retail sales miss, lower commodities

TORONTO – The Canadian dollar declined Thursday morning amid lower commodity prices and a reading on American retail sales that fell short of expectations.

The loonie dipped 0.03 of a cent to 90.9 cents US.

Retail sales for January were down by 0.4 per cent against the 0.3 per cent decline that economists had expected.

Other data showed a slight rise in jobless insurance claims. Applications, which are viewed as a proxy for layoffs, rose 8,000 last week to 339,000.

Traders looked to the major Canadian report of the week. Statistics Canada releases its reading on manufacturing shipments for December on Friday and economists expect that shipments dipped 0.5 per cent month over month following a one per cent gain in November.

Prices drifted lower on commodity markets as March crude on the New York Mercantile Exchange was down 80 cents to US$99.57 a barrel.

April bullion was $1.20 lower to US$1,293.80 an ounce while March copper dipped three cents to US$3.22 a pound.

The loonie has enjoyed a solid bounce this month after hitting 4 1/2 lows of about 89.5 cents US. There are several reasons for the turnaround, including growing optimism that the Keystone XL pipeline to carry oilsands crude from Alberta to refineries on the Texas Gulf Coast will be built. Also, economists have been pricing in a lower liklihood of an interest rate cut, the latest job creation data was positive and the federal government’s budget on Tuesday was well received.