TORONTO – The Canadian dollar closed lower Friday amid weaker than expected pricing pressures in December and a solid November retail sales report.
The loonie was down 0.13 of a cent to 80.49 cents US as Statistics Canada reported that the consumer price index — the key measure of inflation — rose 1.5 per cent in the 12 months to December. That’s down from November’s rate of 2.0 per cent.
The agency also said retail sales rose 0.4 per cent to $43 billion in November. Economists had generally expected a decline.
Oil prices rose earlier in the day on news of the death of Saudi Arabia’s monarch, King Abdullah. But the March contract closed down 72 cents to US$45.59 a barrel.
Crude prices have plunged 40 per cent since the end of November when Saudi Arabia said it would seek to maintain market share by refusing to cut production in order to support prices. Overall, prices are down about 55 per cent from last June because of global oversupply.
The question now is whether Abdullah’s successor, Prince Salman, 79, will change the kingdom’s oil policy.
A rising U.S. dollar helped push other commodities lower as February bullion declined $8.10 to US$1,292.60 an ounce, while March copper shed eight cents to US$2.50 a pound.
The loonie has fallen sharply this week as the Bank of Canada unexpectedly cut rates a quarter point to 0.75 per cent and the European Central Bank embarked on a major program of quantitative easing. As well, data showed a disappointing read on manufacturing shipments in November.
Including Friday’s decline, the loonie fell more than three cents this week to lows last seen in April 2009.
The currency has also been weakened by the collapse in oil prices.