Loonie Drops on Poor Canadian Retail Sales

The Canadian dollar slumped against its US counterpart and erased its gains versus the Japanese yen today as Canadian retail sales unexpectedly fell. Still, the currency was higher against the euro.
Canada’s retail sales dipped 0.5 percent in April from March, Statistics Canada reported. Analysts promised that the sales would rise with the approximately same 0.4 percent rate as in March. The poor data spurred speculations that the Bank of Canada would refrain from hiking interest rates on its next policy meeting. Previously, the central bank was suggesting that it may be possible to raise borrowing costs in the near future.
News from around the world was not supportive for Canada’s currency either. Manufacturing growth slowed in the United States, while in China and the eurozone the sector actually contracted. Additionally, US unemployment claims stayed almost unchanged, while traders were hoping for a decrease.
USD/CAD surged from 1.0182 to 1.0286 as of 23:59 GMT today. EUR/CAD ticked down from 1.2397 to 1.2907. CAD/JPY slipped from 78.05 to 77.77 after it touched the high of 78.64 that was not seen since May 22.

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