Canada’s dollar fell for the first time in six days as central-bank Governor Stephen Poloz warned of deflation after a rise in U.S. retail sales lifted bets the Federal Reserve will start trimming its bond-buying program.
The Canadian dollar declined versus most major peers as Poloz said policy makers had no view on the currency and were instead focused on preventing inflation from falling too low. It rose earlier to the highest point in two weeks versus its U.S. peer on gains in natural gas and crude oil, the nation’s largest export. Fed policy makers meet Dec. 17-18.
“In the currency war, Canada is a conscientious objector,” said David Watt, chief economist at the Canadian unit of HSBC Holdings Plc. “U.S. retail sales was the key factor, it just basically bolstered the U.S. dollar as people are looking ahead to, ‘Is the Federal Reserve potentially going to taper next week?’”