The Canadian dollar strengthened against most major currencies on Friday after stronger-than-expected retail sales data. Official figures showed March retail sales rose 0.8%, surpassing the 0.6% growth forecast by economists, though core retail sales (excluding autos and gas) unexpectedly declined 0.7%.
The mixed report still provided enough positive momentum to lift the loonie, as markets focused on the headline growth figure as a sign of resilient consumer spending. The currency’s gains were somewhat tempered by the weak core reading, which suggested underlying consumer demand may be softening in certain sectors.
Traders will now look to upcoming inflation and GDP data for further clues about the Bank of Canada’s policy path, with the currency’s rally testing key resistance levels against the U.S. dollar. The loonie’s performance reflects shifting expectations about when major central banks might begin cutting interest rates this year.
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