CAD Turns Lower After Data Fails to Reach Consensus Forecast

The Canadian dollar went down today, falling for the third consecutive trading session against the Japanese yen, after economic reports released by Statistics Canada missed market expectations.

The Consumer Price Index rose 0.1% in September from August (not adjusted for seasonal variations) while experts had predicted a 0.2% increase. The core CPI was up 0.2% — in line with expectations. Retail sales fell 0.1% in August from July (seasonally adjusted), proving the median forecast of 0.5% growth completely wrong. Core retail sales also failed to reach the analysts’ consensus estimate, showing no change whereas the prediction promised an increase by 0.4%.

Earlier this week, the Bank of Canada decided to keep its key interest rate at 0.5% and other rates also without change. At the same time, the central bank lowered its growth forecast, saying:

Looking through the choppiness of recent data, the profile for growth in Canada is now lower than projected in July’s Monetary Policy Report.

USD/CAD rallied from 1.3228 to 1.3323 as of 16:56 GMT today, trading near the highest level since March 16. EUR/CAD went up from the opening of 1.4456 to 1.4484, bouncing from the daily low of 1.4394. CAD/JPY dropped from 78.55 to 77.96, and its session minimum was at 77.59.

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