Canadian retail sales demonstrated disappointing results, while the outlook for inflation data is rather poor. Is the Canadian dollar bothered by this? Not at all. On the contrary, the currency posted solid gains today.
Canadian retail sales dipped by 0.1 percent in March following gains in January and February, while traders have counted on 0.2 percent increase. Core retail sales rose only marginally by 0.1 percent compared to the forecast growth of 0.5 percent. What is more, analysts predict that tomorrow’s inflation report will show a slowdown from 0.6 percent in March to 0.3 percent in April.
All in all, domestic fundamentals look detrimental for the Canadian currency so why did it rally today? The most obvious reason for such behavior is the favorable report from China that was supporting commodity currencies.
USD/CAD dropped from 1.0911 to 1.0894, and EUR/CAD slid from 1.4932 to 1.4871 as of 16:47 GMT today. CAD/JPY rallied from 92.87 to 93.38.
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