The Canadian dollar moved higher against its US counterpart on Friday, following the release of solid retail sales data that reflected growing consumer demand. A fresh reading for the consumer price index also supported the loonie today after matching analyst estimates.
Statistics Canada, the nationâs official statistical office, stated in a report that retail sales continued to increase for the third month in a row, gaining 0.6% to $48.9 billion in May. Sales increased in 5 of 11 subsectors, as consumers bought more new cars, electronics, and food in May from April. The data beat analyst estimates of a 0.2% increase.
Sales at food and beverage stores increased 0.9% in May, while motor vehicle and parts dealers had 2.4% stronger sales. On the other hand, sales at gasoline stations decreased 0.6% due to weaker gasoline prices, which marked the first decrease in three months. The report added that core retail sales dropped 0.1% in May, despite expectations of a 0.3% gain.
A separate report revealed that consumer prices increased 1.0% on a yearly basis in June, following a 1.3% increase in May. 0.6% higher prices of food counteracted cheaper energy costs last month, while prices of shelter and transportation climbed 1.6% and 0.6%, respectively. After excluding food and energy prices, core consumer prices increased 1.4% in May from a year earlier.
On a monthly basis, the consumer price index retreated 0.1% in June. Consumer prices lagged last month to remain far from reaching the Bank of Canadaâs target for inflation, which stands at 2.0%.
USD/CAD traded at 1.2565 as of 14:05 GMT on Friday, from 1.2550 at 13:20 GMT, the pairâs lowest level since yesterday. USD/CAD began the day at 1.2594. GBP/CAD retreated to 1.6313, after reaching 1.6296 at 13:40 GMT, which was also the lowest level since yesterday. GBP/CAD started trading today at 1.6330.
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