- Canadian retail sales declined
- US Manufacturing and Services PMIs Accelerated
- USD/CAD has risen 200 points in just one week
USD/CAD continues to climb but has given up most of the gains. USD/CAD trades at 1.3527 in Europe
Canada’s core retail sales drop
Markets were expecting a disappointing Canadian retail sales report for February. The numbers did not disappoint. Headline retail sales declined 0.2%. This was above the minus 0.6% gain, but below 1.6% in January. Core rate was worse with a drop of 0.7% versus a forecast of -0.1%, and a previous reading of 0.9%. The weak numbers extended the Canadian dollar’s woes, as USD/CAD is about 200 points higher since April 14th.
Statistics Canada has predicted a 1,4% decline in retail sales for March. It’s clear that the Bank of Canada’s aggressive tightening is dampening consumer spending, and high inflation has taken a bite out of disposable income. At its two most recent meetings, the BoC paused and kept the benchmark rate at 4.5%. It is currently monitoring the effects of the tightening cycle. If the economy decelerates, we can expect the BoC to continue to hold rates, as long as inflation doesn’t move upwards. Canada releases its February GDP on Friday ,…
