The Canadian economic data overview
Statistics Canada will publish domestic consumer inflation figures for May and April monthly retail sales data at 1230 GMT this Friday. The headline CPI is expected to show a steady rise of 0.3% m/m, with the yearly rate anticipated rising to 2.5% in May. Conversely, the broader BoC measure of core inflation is expected to have ticked lower to 1.4% y/y, albeit is seen edging higher on a monthly basis.
Separately, the monthly retail sales are expected to remain flat on a monthly basis in April as compared to a 0.6% growth recorded in the previous month. Meanwhile, the measure of sales that excludes automobiles – core retail sales – is projected to expand by 0.5% in April, following a 0.2% contraction in March.
In view of Analysts at TDS: "We see modest downside risks to retail sales on a pullback in motor vehicle sales, which should leave sales down 0.2% m/m while ex-auto sales post a 0.3% gain (market: 0.0%, 0.5%)."
How could it affect USD/CAD?
The pair has already started correcting from one-year tops and was seen retreating farther below the 1.3300 handle. Today's macro data would influence investors' expectations for an interest rate hike next month from the Bank of Canada and eventually have a lasting effect on the Canadian Dollar.
A stronger than expected reading(s) could exert some additional long unwinding pressure and continue dragging the pair further towards the 1.3200 round figure mark. Alternatively, softer data should assist the pair to regain traction and move back above the 1.3300 handle, towards retesting one-year highs resistance near the 1.3335 region.
About the Canadian CPI and retail sales
Consumer Price Index Core is released by the Bank of Canada. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile core 8 are considered as the key indicator of inflation in Canada. Generally speaking, a high reading anticipates a hawkish attitude by the BoC, and that is said to be positive (or bullish) for the CAD.
The Retail Sales released by the Statistics Canada is a monthly data that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. The retail sales index is often taken as an indicator of consumer confidence. It shows the performance of the retail sector in the short term. Generally speaking, the positive economic growth anticipates bullish movements for the CAD.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.