Loonie Weakens After Disappointing Canada Inflation, Retail Sales Data

The Canadian dollar declined against its major counterparts in the European session on Friday, following the release of reports showing unexpected decline in nation's retail sales for August and consumer inflation for September.

Data from Statistics Canada showed that consumer inflation deteriorated 0.1 percent on a seasonally adjusted monthly basis in September following a 0.1 uptick in the previous month. Economists were looking for a 0.1 percent gain.

Core inflation, excluding food and energy, fell 0.1 percent from last month, when prices grew 0.2 percent.

Separate data showed that Canada's retail sales fell unexpectedly in August.

Retail sales declined 0.1 percent to C$50.8 billion in August.

That was down from forecasts for a 0.3 percent gain. The July figure was revised down to a 0.2 percent increase, from the originally reported 0.3 percent.

Core retail sales, excluding motor vehicle and parts dealers, declined 0.4 percent, in contrast to forecasts for 0.1 percent increase.

This follows a revised 0.8 percent advance in July, which was originally reported as 0.9 percent.

The currency was trading in a positive territory against its major counterparts in the Asian session, with the exception of the aussie.

The loonie declined to a 3-day low of 1.5039 against the euro, after rising to a 9-day high of 1.4931 at 5:30 am ET.

Preliminary data from the European Central Bank showed that euro area current account surplus increased in August from the previous month.

The current account surplus rose to EUR 24 billion from EUR 19 billion in July. A year ago, the surplus was EUR 39 billion.

Reversing from an early high of 0.9270 against the aussie, the loonie weakened to a 3-week low of 0.9366.

Data from the Ministry of Internal Affairs and Communication showed that Japan consumer inflation fell 1.2 percent on year in September.

That was shy of expectations for an increase of 1.3 percent, which would have been unchanged from the August reading.

The loonie slipped to more than a 5-week low of 1.3120 against the greenback, off its early high of 1.3028.

Having advanced to 86.37 against the yen at 7:15 am ET, the loonie reversed direction and retreated to 85.68.

Looking ahead, Bank of England Governor Mark Carney will speak at the Economic Club of New York at 11:30 am ET.

Federal Reserve Bank of Atlanta President Raphael Bostic speaks about the economic outlook in Georgia at 12:00 pm ET.