Home Daily Commentaries The Loonie retraces after weaker than expected retail sales numbers

The Loonie retraces after weaker than expected retail sales numbers

Daily Currency Update

CAD - Canadian DollarThe USD/CAD pair increases 0.18 percent (weaker Loonie) following lower than expected retail sales number. According to Statistics Canada, retail sales rose for the third consecutive month, edging up 0.1 percent to $51.5 billion in April. Excluding sales at motor vehicle and parts dealers and gasoline stations, retail sales were down 0.1 percent. Sales were up in 7 of 11 subsectors, representing 74 percent of retail trade. Higher sales at gasoline stations and food and beverage stores were the main contributors to the gain. After removing the effects of price changes, retail sales in volume terms decreased by 0.2 percent. With crude oil trading at the same prices as yesterday and the equity index markets falling by around 0.15 percent on average, we should expect a consolidation in the Loonie after the astonishing rally. The Loonie has rallied against the Greenback around 1 percent so far this week. Technically speaking, the USD/CAD pair might have space to fall to an important support of around 1.3125 or the 1.3100 handle over the next few days. Additionally, it might also have a correction towards a crucial resistance at around 1.3332. However, for today, we expect to have minimal movements. The primary support is anticipated to be around 1.3169 and the resistance around 1.3244.

Key Movers

The Euro continues to rise after data showed that the Eurozone's flash PMI composite hit a seven-month high of 52.1 in June. Growth was primarily driven by the service sector, which offset the ongoing downturn in the bloc's manufacturing sector. Eurozone PMI data showed no further deterioration in sentiments in the Eurozone. Underlying growth momentum remained weak, but there were more tentative signs of improvement in Germany and France. In the U.K., Boris Johnson and Jeremy Hunt are the chosen ones; they will "compete" in the contest to become the U.K.'s next Prime Minister as they seek votes from the Conservative Party's members over the next month. However, Boris Johnson will face Jeremy Hunt amid rumors that some of the Boris camp voted for Hunt because it is an easier opponent to beat in the last round. Probably Hunt's chances are minimal. The British Pound is falling against all the major currencies this morning except for the Kiwi dollar. The U.S. nearly bombing Iran hit market sentiment; global equity indexes are falling this morning.

Expected Ranges

  • USD/CAD: 1.3169 - 1.3244 ▲
  • EUR/CAD: 1.4927 - 1.4987 ▲
  • GBP/CAD: 1.6651 - 1.6781 ▼
  • AUD/CAD: 0.9120 - 0.9160 ▲
  • NZD/CAD: 0.8650 - 0.8690 ▼