NEW YORK, July 20 (Reuters) - The Canadian dollar extended gains against the U.S. dollar on Friday after data showed Canada’s annual inflation rose last month to its highest in more than six years, while retail sales in May posted its biggest increase in seven months.
Canada’s annual inflation rate rose to 2.5 percent in June, exceeding market expectations. Annual inflation has now exceeded the Bank of Canada’s 2.0 percent target for the fifth straight month.
Canadian retail sales in May, meanwhile, rose 2.0 percent, its biggest increase in seven months, pushed up by sales at auto dealers and gasoline stations.
In early morning trading, the U.S. dollar fell more than 1 percent against the Canadian currency to C$1.3133. (Reporting by Gertrude Chavez-Dreyfuss Editing by Chizu Nomiyama)