The US dollar retreated from a three-and-half low against the Canadian dollar on Thursday, after an official report showed that Canadian retail sales rose less-than-expected in February.
USD/CAD trimmed losses to hit 0.9499 during early New York trading, from the lowest level of 0.9455 since November 2007.
Retail sales in Canada went up by 0.4 percent in February against the markets’ expectation of 0.6 percent increase, data from Statistics Canada showed on Thursday.
However, core retail sales, excluding automobile sales, increased 0.7 percent in the month while the economists’ had expected a gain of 0.5 percent.
Earlier on Thursday, the greenback extended losses against its major counterparts as risk appetite sharpened for higher-yielding currencies, amid concerns over the US debt.
S&P on Monday had cut its outlook on the US from ‘stable’ to ‘negative’ citing nation’s very large budget deficit and rising indebtedness.
Analysts said that the greenback was also weighed down by the concerns that Federal Reserve will lag behind other central banks in raising the interest rates.
Also, the US labor department on Thursday said that weekly initial jobless claims fell 13,000 to 403,000 last week, against the expectations of a fall to 390,000.
Meanwhile, the loonie also traded higher against the euro, with EUR/CAD easing up 0.04 percent to hit 1.3841.
“Domestic and external events served to reassert that CAD will remain persistently strong. Sovereign concerns in the US and the Euro area, highlight Canada's solid long-term fiscal position, while Canadian CPI data remained that the BoC, despite its CAD concerns, can't stay sidelined indefinitely, and will likely hike rates starting from 19 July,” said a note from RBC Capital Markets.