The Canadian dollar is trading mixed against its most traded currency rivals midweek. The loonie has been gaining on the greenback on Wednesday as higher-than-expected inflation and strong retail sales data were in the backdrop of the Canadian dollar’s ascent. But falling energy prices capped the currencyâs modest rally.
According to Statistics Canada, the consumer price index (CPI) rose by 0.8% in June, up from 0.3% in May. The annualized inflation rate surged from -0.4% in May to 0.7% in June, a more than nine-year high, led by gains in food (2.7%), shelter (1.7%), and health care (0.5%). There was a decline in prices for apparel, gasoline, and education. The market had penciled in a reading of 0.4%.
The statistics agency reported on Tuesday that retail sales surged 18.7% last month, up from the 25% drop in May. Despite the increase being the highest on record, retail sales fell short of the market forecast of 20%. The biggest gains were seen in apparel (92.6%), motor vehicle and parts (66.3%), furniture and home furnishings (58.6%), and gasoline (17.1%). Surprisingly, sales at food and beverage stores slipped 2%, down from an all-time high of 23.2% in May. Year-over-year, retail transactions declined by 18.4%. It also offered a retail sales advance estimate of 24.5% in July.
New housing prices edged up 0.1% in June for the second straight month, meeting the median estimate.
Later this week, the producer price index (PPI), prices for raw materials, average weekly earnings, and the budget numbers will be published.
Meanwhile, energy prices failed to muster up a rally in the middle of the trading week. August West Texas Intermediate (WTI) crude oil futures tumbled $0.51, or 1.22%, to $41.41 per barrel. September natural gas futures dipped $0.03, or 1.79%, to $1.645 per million British thermal units (btu). The resurgence in crude prices has contributed to the loonieâs rebound in recent months. Since oil and gas continue to be Canadaâs main export, any change in prices â high or low â can affect the currency and the broader national economy.
The USD/CAD currency pair dropped 0.16% to 1.3439, from an opening of 1.3460, at 13:58 GMT on Wednesday. The EUR/CAD advanced 0.41% to 1.5579, from an opening of 1.5516.
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