Canadian dollar rises as October flash economic estimates show gains

The Canadian dollar CADUSD rose against its US counterpart on Tuesday as investor risk appetite picked up and preliminary domestic data showed retail sales climbing in October, while investors awaited comments by a senior Bank of Canada policy-maker.

Canadian retail sales fell by 0.5 per cent in September from August, matching estimates, weighted by lower sales at gasoline stations, data from Statistics Canada shown.

However, a flash estimate showed sales rebounding by 1.5 per cent in October. Other flash estimates were also upbeat, with manufacturing sales rising 2 per cent and wholesale trade up 1.3 per cent.

Global shares recovered some of the previous day’s losses, drawing comfort from less-hawkish comments on interest-rate hikes by Federal Reserve policy-makers, although concern over more COVID infections in China kept gains in check.

The safe-haven US dollar fell against a basket of major currencies, while the price of oil, one of Canada’s major exports, rose after top exporter Saudi Arabia said OPEC+ was sticking with output cuts and could take further steps to balance the market.

US crude oil futures were up 1.5 per cent at $81.21 a barrel The Canadian dollar advanced 0.4 per cent to 1.34 per greenback, or 74.63 US cents, after trading in a range of 1.3386 to 1.3457. On Monday, the currency touched its weakest in 11 days at 1.3495.

Gains for the currency came ahead of a fireside chat with Bank of Canada Senior Deputy Governor Carolyn Rogers on financial system stability. The central bank is due to publish her prepared remarks at 11:45 am ET (1645 GMT).

Canadian government bond yields were lower across a more deeply inverted curve, tracking the move in US Treasuries.

The 10-year eased 2.9 basis points to 3.058 per cent, while it fell 2.3 basis points further below the 2-year rate to a gap of about 88 basis points.


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