By David George-Cosh TORONTO--The Canadian dollar erased gains early Thursday after a stronger-than-expected U.S. retail sales report and dovish comments by the Reserve Bank of Australia Governor broadly lifted the U.S. dollar against most major currencies. The U.S. dollar was recently at C$1.0604 Thursday morning, from C$1.0589 late Wednesday, according to data provider CQG. The crucial U.S. holiday shopping season got off to a strong start as retail sales rose 0.7% in November, slightly ahead of the 0.6% rise forecast by economists. November retail sales rose 4.7% from the same period a year earlier. The report adds more encouraging news on the U.S. economy which helps to add to speculation about the Federal Reserve's decision next week on whether it will taper its $85 billion bond-buying program, said Jennifer Lee, senior economist at BMO Capital Markets. Prior to the release, RBA Governor Glenn Stevens said Australia needs to see its exchange rate fall down to $0.85 from current levels, a move that saw the U.S. dollar jolted higher across most major currencies, including the Canadian dollar. The Canadian dollar remains at risk for further moves later in Thursday's session as Bank of Canada Governor Stephen Poloz will deliver a speech and hold a press conference in Montreal in the mid-afternoon session. Write to David George-Cosh at david.george-cosh@wsj.com

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