USD/CAD: Canadian Dollar Eyes Retail Sales Ahead of BoC

07/19/2024

1 minute read

2024.07.19 08:59

The is calm on Friday. In the European session, USD/CAD is trading at 1.3709, up 0.04% on the day at the time of writing.

We could see stronger movement in the North American session with the release of Canadian .

Will Retail Sales Suffer a Reversal?

Canada’s is expected to regress in June after a strong reading a month earlier. The market estimate stands at -0.6% m/m, after a gain of 0.7% in May. Annually, retail sales sparkled with a gain of 1.8%.

Today’s retail sales report is the final key release ahead of the Bank of Canada’s meeting on July 24. The BoC is widely expected to cut interest rates for a second straight month after last week’s positive inflation report.

fell from 2.9% to 2.7% y/y in June and declined by 0.1% on a monthly basis, the first decline since December 2023. also decreased slightly.

The BoC has already demonstrated that it is ready, willing and able to cut rates, as both headline and core inflation are within the 1% to 3% target range.

Households and businesses are looking for more relief from high interest rates and the central bank will need to continue lowering rates in order to avoid a recession.

In the US, unemployment claims jumped to 243 thousand last week, up from a revised 223,000 in the previous release and higher than expectations.

The increase is another indication that the labor market has been softening, which supports the case for a rate cut. The markets have priced in a 95% probability a rate cut in September, according to CME’s FedWatch. USD/CAD-4-Hour Chart