The Canadian dollar closed lower Friday amid data showing a bigger-than-expected drop in December retail sales and tame inflation.
The loonie ended down 0.28 of a cent at 89.82 cents (U.S.) as Statistics Canada reported that December retail sales tumbled 1.8 per cent from November. Economists had expected a drop of just 0.4 per cent.
However, the currency was off its worst levels of the session as the agency also reported that the consumer price index was up 1.5 per cent in January from a year earlier. That was slightly higher than the 1.3 per cent rise economists had expected but below the Bank of Canada's target of 2 per cent.
The data served to indicate to markets that the Bank of Canada won't be moving on rates until at least a year from now.
"We remain confident that the most likely path for inflation is a gradual shift towards the [central bank's] two per cent target," said Toronto-Dominion Bank senior economist Francis Fong.
"As such, we maintain our view that the bank will likely remain on hold until at least the second half of 2015 before moving off the sidelines."
The dollar had a rough week, sliding about 1.25 cents.
Analysts point to recent soft economic data, concerns over the global growth outlook – China's in particular – a dovish tone on interest rates from the Bank of Canada and a potential delay in the Keystone XL pipeline decision.
Elsewhere, there was also a commitment by Japan's central bank to carry on with its extensive stimulus package longer than planned.
The Bank of Japan's minutes of its January policy meeting were released Friday. Board members said that in order to avoid any misunderstanding about the BOJ's program of ambitious monetary easing, the bank needed to "provide a clear explanation that it did not strictly set this to end in two years."
As part of Prime Minister Shinzo Abe's economic revival strategy, the central bank in April last year announced a policy overhaul that aimed to double the money supply and achieve 2 per cent inflation within about two years.
The April crude contract in New York declined 55 cents to $102.21 a barrel.
March copper was ahead 1 cent at $3.29 a pound while April gold bullion gained $6.70 to $1,323.60 an ounce.