USD/CAD Eyes Canadian Retail Sales
2024.09.20 08:34
The Canadian dollar is steady on Friday. In the European session, is trading at 1.3573 at the time of writing, up 0.12% today. On the data calendar, Canada releases retail sales, while it’s an unusually quiet day in the US, with no releases.
Canada’s Retail Sales Expected to Bounce Back in July
Canada’s retail sales are projected to have jumped 0.6% m/m in July, compared to -0.3% in June. On an annualized basis, retail sales are expected to improve to 0.7%, up from 0.2% in July. The Canadian economy is showing weakness, as high interest rates have taken their toll on economic growth. The good news is that inflation appears under control, falling to 2% in August, down from 2.5% a month earlier. This matches the Bank of Canada’s target and the aim now is to keep trimming rates and avoid a labor market crash. The BoC has already cut rates three times for a total of 0.75%, bringing the benchmark rate to 4.25%. The BoC doesn’t meet again until October 23 and will have plenty of data to review beforehand.
In the US, inflation is largely under control and the Federal Reserve has shifted its primary focus to the labor market, as job growth as deteriorated faster than expected. That slide has unnerved financial markets and may have been a key factor in the Fed’s jumbo rate cut of 50 basis points this week. Thursday’s unemployment claims for the period ending Sept. 14 were lower than expected, at 219 thousand. This was well below the revised 231 thousand reading a week earlier and beat the market estimate of 230 thousand.
USD/CAD Technical
- 1.3580 is under pressure in resistance. Above, there is resistance at 1.3626
- 1.3511 and 1.3465 are the next support levels
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