When are the Canadian retail sales and how could they affect USD/CAD?

Canadian retail sales overview

Statistics Canada will publish the monthly retail sales report for the month of December later during the early North-American session at 13:30 GMT. Consensus estimates point to a second consecutive month of decline, though at a slightly slower pace of 0.3% m/m as compared to a 0.9% fall in the previous month. Meanwhile, sales at the retail level, excluding automobiles, are also seen to continue their disappointing run and fall by 0.3% m/m rate during the reported month.

Analysts at National Bank Financial offered their views on today's upcoming Canadian data and wrote: “We expect both headline and ex-auto sales to have retraced in the month, reflecting poor auto sales and a slump in gasoline prices which likely hit gasoline station receipts.”

Deviation impact on USD/CAD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to be in the range of 38-43 pips in case of deviations up to +0.38 to -0.58, although in some cases, if notable enough, can fuel movements of up to 73-76 pips in the subsequent 4-hours.

How could it affect USD/CAD?

Ahead of the key release, the pair traded with a negative bias and was hovering around the 1.3200 round figure mark. Given the recent bullish run-up in crude oil prices, surprisingly positive readings will be enough to provide a strong boost to the Canadian Dollar and drag the pair back towards challenging the very important 200-day SMA support, currently near the 1.3145 region.

Alternatively, a weaker than expected print might prompt some additional short-covering move and assist the pair to surpass 100-day SMA hurdle, around mid-1.3200s, and dart towards testing weekly highs, near the 1.3280 region. The pair could further aim towards making a fresh attempt towards conquering the 1.3300 round figure mark.

Key Notes

   •  Canada: Focus on retail sales this week - NBF

   •  USD/CAD slips to session low, Canadian retail sales eyed for fresh impetus

   •  USD/CAD Analysis

About Canadian retail sales

The Retail Sales released by 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.