The volume of retail sales in Canada fell 1.7% in January, worse than expected. Also core sales plunged with -1.8%. However, CPI is up 0.9% m/m and 1% y/y. Core inflation is up 0.6% and 2.1% y/y, which is a-OK.
Retail sales numbers trump the solid inflation data. USD/CAD tops 1.27
Canada was expected to report a rise of 0.5% in headline CPI m/m in February and 1% y/y. Core inflation was expected to rise 0.5% m/m and 2.1% y/y, similar to January. Retail sales carried expectations for a drop of 0.7% in January. Core sales were predicted to slide 0.4%.
USD/CAD traded steadily in range around 1.2680 towards the multiple publications.
Earlier this week, Dollar/CAD reached new multi-year highs, pushed by the stronger dollar, weak Canadian data and falling oil prices. The relatively dovish message from the Fed allowed the loonie to recover.
Relatively stable inflation, especially a 2%+ core number, kept the Bank of Canada relatively bullish, sending a message that another rate cut (after that surprising January move) is not exactly on the cards.
Here is how this swing higher looks on the chart, breaking the range trading that preceded it:
In our latest podcast we discuss The Fed and the road ahead – all you need to know
Share
