Canadian retail sales rose 0.5% as expected, but this came on top of a downwards revision for July: 0.4% instead of 0.6% originally reported. Core sales look worse: no change m/m instead of 0.4% expected and also here we had a downwards revision from +0.9% to +0.5%. This is already more painful.
USD/CAD hits a high of 1.3295, still not hitting 1.33. The pair is basically returning to the top of the range, and the question about breaking 1.33 remains open. Update: we had a break above 1.33, with the pair hitting a new high of 1.3306. The break awaits confirmation.
Retail sales in Canada were expected to rise 0.5% in August, following a rise of 0.6% in July. Core sales, which exclude autos among other volatile items, carried expectations for a rise of 0.4% after 0.8% in the previous month.
USD/CAD traded under 1.3270 before the release.
The Canadian economy is in recession after squeezing in Q1 and Q2, but this recession is shallow. The Canadian dollar has been trading in a band between 1.30 and 1.33 for quite some time.
We will later hear oil related news: the level of crude inventories. They are expected to drop by 1 million after a slide of 2.1 million last month.
More: CAD: Don’t Fall Into The Gap – CIBC
In our latest podcast we explain why the dollar defies the doves
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