The Canadian dollar dropped, touching the lowest since June against its US counterpart, today as retail sales dipped in December and annual inflation was slowest in three years. The currency managed to trade sideways versus the Japanese yen, which was weakened by prospects of intervention.
The Consumer Price Index rose 0.5 percent in January from a year ago after rising 0.8 percent in December. This was the smallest gain since October 2009. Falling gasoline prices were the major reason for the meager increase. Retail sales sank as much as 2.1 percent in December following five monthly gains.
News outside of Canada was more supportive for the loonie (as the Canadian currency is nicknamed). The sharp rise of the Ifo Business Climate Index improved the risk sentiment somewhat, though it still remains subdued.
USD/CAD advanced from 1.0182 to 1.0225 as of 19:55 GMT today after reaching 1.0254 — the highest rate since June 29. EUR/CAD rose from 1.3433 to 1.3476. CAD/JPY was little changed at 91.33.
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