The Canadian Core Retail Sales indicator measures retail sales, excluding automobile sales, which tend to be very volatile and distort underlying trends. A reading which is higher than the market forecast is bullish for the Canadian dollar.
Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Friday at 12:30 GMT.
Indicator Background
The Core Retail Sales indicator provides an important snapshot of consumer spending and confidence in the economy. Consumer spending is critical to economic growth, so this indicator should be treated as a market-mover.
Core Retail Sales took a dive in June, coming in at -0.8%. This was well short of the forecast of +0.3%. The markets are expecting a sharp improvement in the July report, with an estimate of +0.5%.
Sentiments and levels
The Canadian dollar has improved this week and picked up ground after the Federal Reserve held rates at 0.25%. At the same time, oil prices are under pressure, which could weigh on the Canadian currency. So, the overall sentiment is neutral on USD/CAD towards this release.
Technical levels, from top to bottom: 1.3353, 1.3219, 1.3081, 1.2990, 1.2900 and 1.2804
5 Scenarios
- Within expectations: -0.1% to 0.5%: In this scenario, USD/CAD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 0.6% to 1.0%: A reading above expectations would be an indication of growth in the Canadian economy, and could push the pair below one support level.
- Well above expectations: Above 1.0%: An unexpectedly sharp rise in retail sales could propel USD/CAD downwards, and two levels of support could break.
- Below expectations: -0.6% to -0.2%: A weak reading could push USD/CAD upwards, with one resistance level at risk.
- Well below expectations: Below -0.6%: A very poor reading would hurt the loonie, and the pair could break two resistance levels.
For more on USD/CAD, see the USD/CAD.