Loonie Tumbles After Surprising Drop of Manufacturing Sales

The Canadian dollar declined against all other most-traded currencies today as poor macroeconomic data in Canada and the United States weighed on the loonie. The Canadian currency has trimmed its losses by now but still remained far below the opening level.
Statistics Canada reported that manufacturing sales declined 1.3% in December, demonstrating the third consecutive monthly drop. The main reason for the decline was lower sales of petroleum and coal products. The actual reading was completely opposite to overly optimistic forecasts, which promised an increase by 0.3%.
Released separately, the New Housing Price Index remained flat for the fifth consecutive month, in line with expectations.
Adding to the negative impact of domestic data, extremely poor US retail sales hurt the Canadian currency too as lower sales in Canada’s biggest trading partner will likely result in lower demand for Canadian exports.
The loonie may yet get support from prices for crude oil, which rebounded after earlier decline. The most-traded contract for benchmark North American grade of oil advanced 0.74% to $54.3 on NYMEX.
USD/CAD traded at 1.3287 as of 17:49 GMT today after opening at 1.3253 and rallying to the daily high of 1.3340. EUR/CAD was up from 1.4921 to 1.5007, and its daily high was at 1.5061. CAD/JPY declined from 83.73 to 83.24, touching the low of 82.91 intraday.

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