There were two important economic releases from Canada scheduled for today, the Consumer Price Index and retail sales, and both of them turned out to be disappointing. Unsurprisingly, the market reacted to the news by pushing the Canadian dollar lower.
Canadian retail sales fell 0.1% in June while core components (retail sales excluding motor vehicle and parts dealers) were down 0.8%. Forecasters had promised growth for both indicators. The CPI (not seasonally adjusted) fell 0.2% in July from June whereas analysts had anticipated it to stay unchanged. The only indicator that matched expectations was the core CPI, which showed no change.
Today’s drop of the Canadian dollar that followed the poor data, while being not huge by itself, was bigger than moves during previous days of the current trading week, which was relatively quiet. In fact, it will likely cause the currency to end the week with losses versus such majors like the euro and the Japanese yen.
USD/CAD climbed from 1.2781 to 1.2874 as of 14:34 GMT today. EUR/CAD advanced from 1.4508 to 1.4572. CAD/JPY edged down from 78.11 to 77.86.
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