The Canadian dollar weakened to a seven-month low against its firmer U.S. counterpart on Friday as weaker-than-expected domestic data fueled interest rate cut bets and oil prices fell.
The value of Canadian retail sales unexpectedly declined 0.1 percent in August, data from Statistics Canada showed. Analysts had expected a gain of 0.3 percent.
Canada’s annual inflation rose in September to 1.3 percent from a rate of 1.1 percent in August, but fell short of the 1.5 percent advance analysts had forecast.
“The big surprise this week was the Bank of Canada contention that they actively talked about cutting rates. This (data) is just going to keep the flames alive on that talk,” said Doug Porter, chief economist at BMO Capital Markets.
The implied probability of a Bank of Canada interest rate cut by mid-2017 jumped to more than 40 percent from around 30 percent before the data, overnight index swaps data showed.
via Reuters 
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.