Canadian dollar declines, November inflation data comes in lower than expected

TORONTO - The Canadian dollar closed lower Friday amid rising oil prices and inflation data for November that came in weaker than expected.

The loonie was down 0.08 of a cent to 86.15 cents US as Statistics Canada reported that consumer prices rose two per cent in the 12 months to November, following a 2.4 per cent increase in October. Statistics Canada attributed the big decline to lower gasoline prices. Economists had been looking for inflation to come in at 2.2 per cent last month.

The agency said that on a seasonally adjusted monthly basis, the Consumer Price Index declined 0.2 per cent in November, which was in line with expectations, after rising 0.1 per cent in October.

Statistics Canada also released retail sales data for October that came in stronger than expected.

Retail sales were relatively unchanged, holding at $42.8 billion. Lower sales at motor vehicle and parts dealers and gasoline stations offset higher sales in most other subsectors.

Economists had forecast a drop of 0.2 per cent in retail sales.

The currency found support from higher commodity prices.

Crude prices have plunged almost 50 per cent since mid-year highs but seemed to find support around the US$54 a barrel level this week. On Friday, the January contract in New York climbed $2.41 to US$56.52 a barrel.

Metals were also positive, with February gold up $1.20 to US$1,196 an ounce while March copper gained three cents to US$2.88 a pound.