Canadian dollar hits 7-month high after positive retail sales data

The Canadian dollar strengthened to a seven-month high against its US rival as the American currency posted widespread declines.

On Monday, May 26, the Canadian dollar is trading 0.97% higher than last Friday at 1.37157 per US dollar. It is the sixth consecutive day of gains for the Canadian currency, and the first time since June that it has had such a long winning streak. For the week, the currency is up 1.88%.

Canadian retail sales climbed 0.8% in March compared to February. Preliminary data for April showed a 0.5% increase.

The American dollar dropped against a basket of major currencies. Meanwhile, the price of oil, one of Canada's main exports, rose 0.89% to $61.35 per barrel.

A favorable outlook on core inflation in Canada led investors to assume that the Bank of Canada will leave the key interest rate at its current level of 2.75% on June 4, rather than ease monetary policy as expected.

Following the decline in US Treasury yields, Canada's 10-year bond yield fell 1.5 basis points to 3.360%.