The Canadian dollar today weakened against its major peers such as the US dollar following the release of retail data for the month of December that was below expectations. Statistics Canada reported that the Consumer Price Index for December rose by 1.5% year-over-year, which was below the widely expected figure of 1.7%.
The Canadian dollar gained briefly against its main trading partners including the US dollar, the Australian dollar and the Japanese yen before retracing most of its gains.
The markets subdued reaction to the slightly positive CPI data for December 2016 reported today indicates that the markets currently have a negative sentiment towards the Canadian dollar.The Canadian dollar also seemed to ignore the higher prices of crude oil that should have boosted the loonie.
The loonie was also affected by the data on retail sales for November 2016 released today, which indicated that retail trade had risen by 0.2% up to $45.2 billion for the month. This marked the fourth consecutive month that had recorded an increase in retail sales.
The performance of the Canadian dollar in the future will rely heavily on global crude oil prices as well as events in partner nations, especially the USA. The strength of the US dollar, which is tied to Donald Trump’s policies after assuming office today, will directly impact the loonie.
The USD/CAD currency pair was trading at 1.3350 as at 17:47 GMT having hit a low of 1.3320 shortly after the release of the retail statistics. The AUD/CAD was trading at 1.0066 having hit lows of 1.0046 after the announcement. The CAD/JPY was trading at 85.99 having opened trading at 86.27.
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