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Canadian dollar weakens 0.8% against the greenback
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Touches its weakest since March 15 at 1.3804
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Retail sales rise 1.4% in January
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Canadian bond yields fall across steeper curve
TORONTO, March 24 (Reuters) - The Canadian dollar weakened to its lowest in more than one week against its U.S. counterpart on Friday as global banking crisis concerns flared up and preliminary domestic data showed some major sectors of the economy weakening in February.
The U.S. dollar rallied against a basket of major currencies, while U.S. Treasury yields and equity markets globally fell as banking stocks plunged in Europe. The price of oil, one of Canada's major exports, fell 2.3% to $68.33 a barrel, while the Canadian dollar was trading 0.8% lower at 1.3775 to the greenback, or 72.60 U.S. cents. It touched its weakest level since March 15 at 1.3804. For the week, the currency was on track to decline 0.3%.
Canadian retail sales rose 1.4% in January, data from Statistics Canada showed. But flash estimates for February showed a decline of 0.6% as well as declines for wholesale trade and manufacturing sales, down 1.6% and 2.8% respectively. The flight to quality has led to investors betting that major central banks, such as the Bank of Canada, will shift to cutting interest rates this year. The BoC has already paused its aggressive tightening campaign, leaving its benchmark rate on hold at 4.50% earlier this month. Money markets see a nearly 50% chance that the central bank will cut rates at its next policy decision on April 12 and are pricing in about 100 basis points of easing by the end of the year. Canadian government bond yields were lower across a steeper curve, tracking the move in U.S. Treasuries. The 2-year tumbled nearly 20 basis points to 3.254%, its lowest since August 2022, while the 10-year was down 8.5 basis points at 2.679%. (Reporting by Fergal Smith; editing by Jonathan Oatis)
