- USD/CAD dips to near 1.3580 amid multiple headwinds.
- Canadian Retail Sales fell by 0.3% in June, as expected, amid weak demand for automobiles.
- Investors await Fed Powell’s speech at the Jackson Hole Symposium.
The USD/CAD pair slides further to near 1.3580 in Friday’s New York session. The Loonie asset weakens after Statistics Canada reported that monthly Retail Sales data for June came in better than projected.
Monthly Retail Sales contracted consecutively by 0.3%, as expected, due to poor demand for automobiles. While Retail Sales, excluding automobiles, unexpectedly rose by 0.3%. Economists estimated the data to decline by 0.2%. This suggests that households postponed their demand for big-ticket items to avoid higher interest obligations. This would prompt expectations of more interest rate cuts by the Bank of Canada (BoC).
Meanwhile, the market sentiment remains favorable for risky assets. S&P 500 futures have posted significant gains in the early American session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 101.40.
Going forward, the major trigger for the Loonie asset will be the Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium at 14:00 GMT. Fed Powell is expected to provide guidance on interest rates and the United States (US) economic outlook.
Market experts expect that Jerome Powell will refrain from providing a specific rate-cut path. However, he is expected to show comfort to market expectations of the Fed pivoting to policy-normalization in September. Investors would like for cues about the likely size of interest rate cuts next month.
Economic Indicator
Retail Sales ex Autos (MoM)
The Retail Sales ex Auto data, released by Statistics Canada on a monthly basis, measures the total value of goods sold by retailers in Canada excluding the key sector of motor vehicles and parts. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales values in the reference month with the previous month. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.
Read more.Last release: Fri Aug 23, 2024 12:30
Frequency: Monthly
Actual: 0.3%
Consensus: -0.2%
Previous: -1.3%
Source: Statistics Canada
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