Canadian Dollar Climbs Against US Peer Following Solid Retail Sales

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 nation’s 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 Canada’s 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 pair’s 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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