Canadian retail sales overview
Statistics Canada will publish the monthly retail sales report for November later this Friday at 13:30 GMT. Consensus estimates point to solid rebound during the reported month and the headline sales are expected to post a growth of 0.4% as compared to the previous month's awful decline of 1.2%. Meanwhile, sales excluding automobiles are also anticipated to rise by 0.4% as against a fall of 0.5% recorded in October.
As analysts at TD Securities explained: “Retail sales are expected to post a muted 0.3% rebound in November as ongoing softness in motor vehicle sales offsets a 0.5% advance in the ex-autos index (market: 0.6%, 0.5%, respectively). Gasoline prices will provide a modest tailwind, but we see little scope for a full rebound in ex-autos and gas after a 0.8% m/m pullback in October. Higher prices should leave volumes largely unchanged following consecutive declines in September and October, which will weigh on expectations for Q4 consumption growth.”
How could it affect USD/CAD?
Ahead of the key releases, the pair traded with a mild positive bias and held comfortably above the 1.3100 round-figure mark, still well below four-week tops set in the previous session. A surprisingly stronger-than-expected reading might be enough to prompt some fresh long-unwinding trade and accelerate the slide back towards the 1.3100 level. Some follow-through selling has the potential to drag the pair further towards the 1.3070 strong horizontal resistance breakpoint now turned support.
Alternatively, a weaker reading might assist bullish traders to make a fresh attempt towards clearing the 1.3170 support zone and aim towards reclaiming the 1.3200 mark. Sustained strength beyond the mentioned barrier should pave the way for some additional gains and lift the pair towards the very important 200-day SMA, around the 1.3235 region.
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.
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