(Adds analyst quotes and details throughout; updates prices)
* Loonie touches its strongest since February 2018 at 1.2312
* Canadian retail sales rise 4.8% in February
* Price of U.S. oil settles 1.5% higher
* Canadian bond yields ease across the curve
By Fergal Smith
TORONTO, April 28 (Reuters) - The Canadian dollar rose
against the greenback on Wednesday as investors cheered domestic
retail sales data and the Federal Reserve stuck to its dovish
stance, trailing the Bank of Canada on moves to reduce emergency
support for the economy.
The loonie was trading 0.6% higher at 1.2315 to the
greenback, or 81.20 U.S. cents, having touched its strongest
intraday level since February 2018 at 1.2312.
"The stars are aligned for the Canadian dollar," said Adam
Button, chief currency analyst at ForexLive. "It is clear that
the Bank of Canada is a step ahead of the Federal Reserve and
maybe two steps ahead in terms of normalizing policy."
The Fed held interest rates and its monthly bond-buying
program steady, nodding to the U.S. economy's growing strength
but giving no sign it was ready to reduce its support for the
recovery.
In contrast, the Bank of Canada signaled last week it could
start hiking rates from their record lows in late 2022 and cut
the pace of its bond purchases.
Other factors supportive of the Canadian dollar include
higher commodity prices and an improved outlook for the domestic
economy, say analysts.
Canadian retail sales rose 4.8% in February from January,
surpassing estimates of a 4% gain, on higher sales at motor
vehicle and parts dealers, as well as gasoline stations, data
from Statistics Canada showed.
"Today's retail sales number underscored that Canadians are
itching to spend money in the post-pandemic period, whenever it
comes," Button said.
Oil, , one of Canada's major exports, settled 1.5%
higher at $63.86 a barrel after U.S. distillate inventories
posted a large drawdown and refiners ramped up activity to the
highest in over a year.
Canadian government bond yields eased across the curve,
tracking the move in Treasury yields. The 10-year
fell 2.2 basis points to 1.537%.
(Reporting by Fergal Smith; Editing by Bernadette Baum and
Peter Cooney)
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