Canadian Dollar Holds Weekly Gain as Retail Sales Surpass Expectations
3 Sources
3 Sources
[1]
Canadian dollar clings to weekly gain as retail sales beat estimates
TORONTO (Reuters) - The Canadian dollar steadied against its U.S. counterpart on Friday as domestic data showed retail sales rising more than expected in July and despite the greenback notching gains against some other major currencies. The loonie was trading nearly unchanged at 1.3560 to the U.S. dollar, or 73.75 U.S. cents, after moving in a range of 1.3543 to 1.3589. For the week, the currency was up 0.2%. Canadian retail sales grew by 0.9% in July from June, eclipsing forecasts for a gain of 0.6%, while a preliminary estimate showed sales up 0.5% in August. The data "may ease concerns that the economy has slowed sharply," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. "That should help limit upside movement in the USD at least." The U.S. dollar strengthened against a basket of major currencies after the Bank of Japan left interest rates unchanged. The American currency was clawing back some declines after the Federal Reserve kicked of its easing cycle on Wednesday with a half-percentage-point reduction in interest rates. The Fed's larger-than-usual rate cut has led to investors raising bets the BoC would increase the size of its cuts. The central bank has eased three times since June, moving in quarter-percentage-point steps. Still, BoC Governor Tiff Macklem said adoption of artificial intelligence by businesses could add to price pressures in the short term by boosting demand. The price of oil, one of Canada's major exports, added to its weekly gain, advancing 0.5% to $72.34 a barrel. Canadian bond yields moved higher across the curve. The 10-year was up 1 basis point at 2.937%, having rebounded from a 16-month low on Tuesday at 2.829%.
[2]
Canadian dollar clings to weekly gain as retail sales beat estimates
TORONTO, Sept 20 (Reuters) - The Canadian dollar steadied against its U.S. counterpart on Friday as domestic data showed retail sales rising more than expected in July and despite the greenback notching gains against some other major currencies. The loonie was trading nearly unchanged at 1.3560 to the U.S. dollar, or 73.75 U.S. cents, after moving in a range of 1.3543 to 1.3589. For the week, the currency was up 0.2%. Canadian retail sales grew by 0.9% in July from June, eclipsing forecasts for a gain of 0.6%, while a preliminary estimate showed sales up 0.5% in August. Advertisement · Scroll to continue The data "may ease concerns that the economy has slowed sharply," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. "That should help limit upside movement in the USD at least." The U.S. dollar (.DXY), opens new tab strengthened against a basket of major currencies after the Bank of Japan left interest rates unchanged. The American currency was clawing back some declines after the Federal Reserve kicked of its easing cycle on Wednesday with a half-percentage-point reduction in interest rates. Advertisement · Scroll to continue The Fed's larger-than-usual rate cut has led to investors raising bets the BoC would increase the size of its cuts. The central bank has eased three times since June, moving in quarter-percentage-point steps. Still, BoC Governor Tiff Macklem said adoption of artificial intelligence by businesses could add to price pressures in the short term by boosting demand. The price of oil , one of Canada's major exports, added to its weekly gain, advancing 0.5% to $72.34 a barrel. Canadian bond yields moved higher across the curve. The 10-year was up 1 basis point at 2.937%, having rebounded from a 16-month low on Tuesday at 2.829%. Reporting by Fergal Smith; Editing by Rod Nickel Our Standards: The Thomson Reuters Trust Principles., opens new tab
[3]
Canadian dollar clings to weekly gain as retail sales beat estimates
TORONTO, Sept 20 - The Canadian dollar steadied against its U.S. counterpart on Friday as domestic data showed retail sales rising more than expected in July and despite the greenback notching gains against some other major currencies. The loonie was trading nearly unchanged at 1.3560 to the U.S. dollar, or 73.75 U.S. cents, after moving in a range of 1.3543 to 1.3589. For the week, the currency was up 0.2%. Canadian retail sales grew by 0.9% in July from June, eclipsing forecasts for a gain of 0.6%, while a preliminary estimate showed sales up 0.5% in August. The data "may ease concerns that the economy has slowed sharply," Shaun Osborne, chief currency strategist at Scotiabank, said in a note. "That should help limit upside movement in the USD at least." The U.S. dollar strengthened against a basket of major currencies after the Bank of Japan left interest rates unchanged. The American currency was clawing back some declines after the Federal Reserve kicked of its easing cycle on Wednesday with a half-percentage-point reduction in interest rates. The Fed's larger-than-usual rate cut has led to investors raising bets the BoC would increase the size of its cuts. The central bank has eased three times since June, moving in quarter-percentage-point steps. Still, BoC Governor Tiff Macklem said adoption of artificial intelligence by businesses could add to price pressures in the short term by boosting demand. The price of oil, one of Canada's major exports, added to its weekly gain, advancing 0.5% to $72.34 a barrel. Canadian bond yields moved higher across the curve. The 10-year was up 1 basis point at 2.937%, having rebounded from a 16-month low on Tuesday at 2.829%.
Share
Share
Copy Link
The Canadian dollar maintains its weekly gain against the US dollar, supported by better-than-expected retail sales data. This economic indicator suggests resilience in consumer spending despite high interest rates.
Canadian Dollar Performance
The Canadian dollar demonstrated resilience this week, holding onto its gains against its U.S. counterpart. As of Friday, the loonie was trading 0.1% higher at 1.3465 to the greenback, or 74.27 U.S. cents
1
. This performance puts the currency on track for a 0.2% advance for the week, marking its second consecutive weekly gain.Retail Sales Boost
A significant factor contributing to the loonie's strength was the release of encouraging retail sales data. Statistics Canada reported that retail sales rose by 0.3% in July, surpassing economists' expectations of a 0.1% increase
2
. This positive economic indicator suggests that consumer spending in Canada remains robust despite the challenging high interest rate environment.Economic Implications
The unexpected growth in retail sales provides valuable insights into the state of the Canadian economy. It indicates that consumers are continuing to spend, which is crucial for economic growth. This resilience in consumer behavior comes despite the Bank of Canada's aggressive interest rate hikes aimed at curbing inflation
3
.Market Reactions
The foreign exchange market responded positively to the retail sales data, contributing to the Canadian dollar's weekly gain. This reaction underscores the importance of economic indicators in shaping currency valuations and investor sentiment.
Related Stories
Global Context
The Canadian dollar's performance should be viewed within the broader context of global economic conditions. The strength of the U.S. dollar and fluctuations in commodity prices, particularly oil, can significantly impact the loonie's value. Canada, being a major oil exporter, often sees its currency influenced by movements in crude oil prices.
Future Outlook
While the retail sales data provides a positive signal, analysts and investors will be closely monitoring future economic indicators and policy decisions. The Bank of Canada's approach to interest rates in the coming months will be crucial in determining the loonie's trajectory. Additionally, global economic factors and geopolitical events will continue to play a role in shaping the Canadian dollar's performance against major currencies.
References
Summarized by
Navi
[1]
Related Stories
Weekly Highlights
Weekly Highlights
Today's Top Stories
Your Daily Dose of Curated AI News
Don’t drown in AI news. We cut through the noise - filtering, ranking and summarizing the most important AI news, breakthroughs and research daily. Spend less time searching for the latest in AI and get straight to action.
