Canadian Dollar Declines As Weak Retail Sales Data Lifts Rate Cut Hopes

The Canadian dollar dropped against its major counterparts in the New York session on Friday, as the nation's retail sales fell sharply in May, strengthening expectations for a rate cut by the Bank of Canada next week.

Data from Statistics Canada showed that retail sales fell by 0.8 percent in May after rising by a revised 0.6 percent in the previous month. Economists had expected retail sales to decrease by 0.6 percent.

Core retail sales, excluding motor vehicle and parts dealers, declined by 1.3 percent after gaining by a revised 1.7 percent in April. Core retail sales were expected to drop by 0.5 percent.

The loonie touched 1.3747 against the greenback, its lowest level since July 2.

The loonie eased to 0.9194 against the aussie, 1.4967 against the euro and 114.51 against the yen, from an early 10-day high of 0.9173 and 2-day highs of 1.4919 and 115.17, respectively.

The currency is seen finding support around 1.39 against the greenback, 0.93 against the aussie, 1.50 against the euro and 110.00 against the yen.