The Canadian dollar closed higher Thursday amid a worse-than-expected showing in retail sales in March.
The loonie ended up 0.18 of a cent at 91.8 cents (U.S.) as Statistics Canada reported that sales fell 0.1 per cent in March to $41.1-billion (Canadian), led by a decrease in the motor vehicle segment. Economists had expected a gain of 0.3 per cent.
The agency said motor vehicle and parts dealers contributed the most in dollar terms to the March decline, with sales falling 0.7 per cent.
On Friday, markets will look to the latest Canadian inflation data and 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 2 per cent year over year in April, up from the 1.5 per cent reading registered the previous month.
Meanwhile, China’s manufacturing contraction eased in May, as HSBC’s preliminary purchasing managers’ index rose to 49.7 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 had also been showing signs of a rebound in China, with factory activity growing weakly in April.
Analysts say 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 2 cents to $3.14 a pound.
June gold bullion gained $6.90 to $1,295 an ounce and July crude lost 33 cents to $103.74 a barrel.
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