The heavily shorted Canadian dollar (CAD) steadied against US Dollar (USD) on Friday, with the currency holding on to a weekly gain as upbeat domestic retail sales data contributed to reduced expectations for Bank of Canada interest-rate cuts.

The loonie was trading nearly unchanged at 1.3975 per U.S. dollar, or 71.56 U.S. cents, after moving in a range of 1.3959 to 1.4020. For the week, the currency was up 0.8%, its biggest weekly gain since August.

“The beginning of the week, the market was just crowded short,” said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull. “If you’re short you need a lot of bearish fuel and it’s not there right now.”

Canadian retail sales rose 0.4% in September from August as consumers spent more at grocery stores and supermarkets, while preliminary data showed an October gain of 0.7%.

It follows hotter-than-expected consumer price index data on Tuesday and the government’s proposal on Thursday of C$6.3 billion ($4.5 billion) in new spending that analysts expect to boost the economy.

Investors have largely set aside expectations for another unusually large half-percentage-point rate cut by the BoC next month after the central bank cut by that magnitude in October.

By the end of 2025, the market is pricing in 75 basis points of further easing, down from 100 basis points before Tuesday’s inflation data.

“This week’s CPI number has been enough to make the entrenched short-position reconsider over the next few weeks,” Bregar said.

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The price of oil, one of Canada’s major exports, settled 1.6% higher at $71.24 a barrel on the intensifying war in Ukraine this week, while the safe-haven U.S. dollar (.DXY) soared against a basket of major currencies.

The Canadian 10-year yield was down 1.3 basis points at 3.445%, after earlier touching its highest level since July 11 at 3.493%.