All the Canadian inflation and retail sales figures exceeded expectations. Inflation in Canada stands at 1.1% and core inflation at 1.2%, both above predictions. Canadian inflation was expected to drop to 0.9% in February after 1.5% in January. Core inflation was expected to slide to 1.1% from 1.4%. Core Month on month CPI rose by 0.8%. It was expected to rise 0.6% after 0.3% beforehand and core CPI rose by 0.7% more than 0.5% expected after 0.2%. Canadian retail sales advanced 1.3% contrary to a rise of 0.8% in retail sales in February after a drop of 1.8% in January. Core sales were expected to correct by advancing 0.9% after a drop of 1.4% beforehand but the actual rise was 1%. Everything is better than expected.
USD/CAD traded around 1.1250 towards the publication, bouncing back from the lows. USD/CAD is crashing below 1.12 to a low of 1.1188 in the aftermath. Update: the pair is below 1.1180 now.
The Canadian dollar had a terrible week, falling to multi-year lows. USD/CAD broke above 1.1224, the previous high and peaked at 1.1277, the highest since June 2009. Various factors hit the C$, with the dovish speech of BOC governor Poloz and Yellen’s rate hike comment standing out.
Last month, we have seen how Canadian consumer price index numbers had a stronger impact than retail sales. Now that both are heading in the same positive direction, the loonie also reacts positively and makes a huge correction to its bad week.
1.277 works as resistance and 1.1224 as support. Further support stands at 1.1170. For more, see the C$ forecast.
This is how it looks on the chart:
Share
