Ahead of the release of the week’s most influential Canadian data the ‘Loonie’ was languishing.
The Canadian currency fell back below 90 cents against the US Dollar and weakened against the majority of its other most traded peers.
‘Loonie’ losses were inspired by China’s disappointing manufacturing report, a fall in the price of iron ore and the expectation that domestic data will show a decline in retail sales.
Economists have forecast that today’s sales data will show a 0.4 per cent decline in retail sales in December following November’s 0.6 per cent gain.
Canada’s consumer price index was forecast to show an annual pace of expansion of 1.3 per cent in January, slightly up from the 1.2 per cent gain recorded the previous month.
Before the actual figures were published strategists with Morgan Stanley noted; ‘The possibility that today’s retail sales and CPI prints could be weak has the potential to undermine the Canadian Dollar further.’
However, Canada’s consumer price index advanced by 0.3 per cent in January, month-on-month, and was up 1.5 per cent on the year.
The core consumer price index increased by 0.2 per cent month-on-month and 1.4 per cent year-on-year.
The acceleration in the inflation rate was the most impressive for over 12 months but was largely due to heating costs rising in response to the unnaturally harsh winter.
Canadian retail sales figures also surprised expectations by falling more-than-forecast.
Sales were down a whopping 1.8 per cent on the month in December, and sales less autos fell by 1.4 per cent.
November’s retail sales gain was negatively revised to 0.5 per cent.
The ‘Loonie’ edged lower against the majority of its currency counterparts after these figures were released.
Today’s GBP/CAD movement has also been driven by UK data. Although UK retail sales fell by more-than-anticipated, the news that Britain posted a trade surplus in January helped the Pound strengthen against its peers.
Next week, the Canadian reports to be aware of include the nation’s current account figures and growth data.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5387,
Canadian Dollar,,US Dollar,0.8983,
Canadian Dollar,,Euro,0.6553,
Canadian Dollar,,Australian Dollar,1.0028,
Canadian Dollar,,New Zealand Dollar,1.0798 ,
US Dollar,,Canadian Dollar ,1.1139,
Pound Sterling,,Canadian Dollar,1.8565,
Euro,,Canadian Dollar,1.5272,
Australian Dollar,,Canadian Dollar,0.9977,
New Zealand Dollar,,Canadian Dollar,0.9241,
[/table]
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