TORONTO, May 22 (Reuters) - The Canadian dollar extended its weekly decline against the U.S. dollar on Friday as domestic data showed growth in retail sales that was driven by higher gasoline prices.
The loonie was trading 0.2% lower at 1.3810 per U.S. dollar, or 74.21 U.S. cents, after touching its weakest intraday level since April 13 at 1.3822. For the week, the currency was down 0.4%, marking its third straight weekly decline.
Canada's retail sales in March grew by 0.9%, beating expectations, as higher prices of gasoline at pumps due to the Iran war boosted the value of the fuel sold. In volume terms, sales were down 0.7%, while a preliminary estimate showed sales up 0.6% in April.
"The war-driven price shock is leaving a mark on Canadian consumers, who have otherwise held in there against elevated economic uncertainty and outright population declines," Shelly Kaushik, a senior economist at BMO Capital Markets, said in a note.
"The details of the March figures suggest consumer spending will remain under pressure until energy prices normalize."
On Tuesday, data showed consumer prices increased less than expected in April, cooling expectations for Bank of Canada interest rate hikes this year.
The U.S. dollar (.DXY), held on to recent gains against a basket of major currencies as traders weighed the prospects of a near-term deal to end the Middle East war and assessed whether the Federal Reserve would raise interest rates if inflation continued to accelerate.
The price of oil , one of Canada's major exports, was trading 0.8% lower at $95.54 a barrel.
Prime Minister Mark Carney stressed Alberta's importance to Canada, a day after the oil-rich province announced a non-binding referendum on whether its residents want to remain in the country.
Canadian government bond yields were mixed across the curve. The 10-year was barely changed at 3.552% after pulling back from a two-year high of 3.744% on Tuesday.
Reporting by Fergal Smith Editing by Nick Zieminski
