Canadian Dollar Soft After Retail Sales Miss Expectations

The Canadian dollar was soft today, falling against other most-traded currencies, after domestic retail sales data disappointed traders. The losses were limited against most of the rivals, though, with the exception of the Japanese yen and the New Zealand dollar — the two strongest currencies on the Forex market during Friday’s trading.
Statistics Canada reported that retail sales rose by 0.6% in July, missing the consensus forecast of a 0.8% increase. It was a sharp slowdown from the previous month’s 22.7% rate of growth, which itself got a negative revision from 23.7%. The report noted that the recovery following the huge losses driven by the coronavirus pandemic was V-shaped:

Overall, the recovery in total retail sales has been V-shaped, with sales in June and July, respectively, rebounding from the record low observed in April.

Wholesale sales rose by 4.3% in July, exceeding the market consensus of a 3.4% increase. Furthermore, the previous month’s big gain got a positive revision from 18.5% to 18.8%.
Released yesterday by Automatic Data Processing, an employment report showed that Canada lost 205,400 jobs in August. However big the drop was, it was far smaller than the previous month’s sharp decline of 523,000.
Prices for crude oil were rising on Friday, with the North American grade of crude gaining almost 1%. While usually, the loonie mirrors the movement of crude, today the currency did not follow the commodity in the rally. Still, the oil prices may have cushioned the blow from the negative retail sales data.
USD/CAD was about flat at 1.3170 as of 15:32 GMT today. EUR/CAD rose from 1.5597 to 1.5623. CAD/JPY dropped from 79.53 to 79.27. NZD/CAD climbed from 0.8884 to 0.8927.
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