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The Canadian dollar edged higher against its U.S. counterpart on Wednesday, but the currency held near an earlier two-week low after being pressured by a decline in oil prices and domestic data showing a bigger-than-expected drop in retail sales.

At 3:25 p.m., the Canadian dollar was trading 0.1 per cent higher at 1.3343 to the greenback, or 74.95 U.S. cents. The currency’s strongest level of the session was 1.3305, while it touched its weakest since Jan. 7 at 1.3371.

Canadian retail sales fell by 0.9 per cent in November from October, in large part because of lower gasoline prices, as well as lower sales at motor vehicle and parts dealers, Statistics Canada said. Analysts had forecast a 0.6 per cent decrease.

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It followed data on Tuesday showing that factory sales and wholesale trade both slumped more than expected in November. Some economists projected a decline in November gross domestic product, which is due for release next week.

“The run of soft Canadian data in November continues, suggesting the economy likely dipped in the month and pointing to some downside risk to even the BoC’s 1.3 per cent estimate for Q4 GDP,” Doug Porter, chief economist at BMO Capital Markets, said in a research note.

Chances of a Bank of Canada interest rate hike by July slipped to less than 40 per cent from nearly 50 per cent before the retail sales data, the overnight index swaps market indicated.

Bank of Canada Governor Stephen Poloz said the Canadian economy was in good shape, although low oil prices were delivering “a material shock” that would cut growth this year.

The price of oil, one of Canada’s major exports, plunged as much as 45 per cent between October and December before paring some of its decline in recent weeks.

U.S. crude oil futures settled 0.7 per cent lower on Wednesday at $52.62 a barrel, pressured by concerns about global economic weakness, forecasts for record U.S. shale production and declining U.S. gasoline prices.

Canadian government bond prices were slightly lower across the yield curve, with the 10-year falling 3 cents to yield 1.974 per cent.

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The gap between Canada’s 10-year yield and its U.S. equivalent widened by 1.7 basis points to a spread of 77.9 basis points, its widest since Dec. 28.

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