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CAD struggles after weaker than expected retail sales

Friday 21 January, 2022

Daily Currency Update

The Canadian dollar struggled against the US dollar on Friday after data showed Canadian retail sales grew less than expected. USDCAD was up 0.33% at around 1.25412 at the time of writing. Demand for the US dollar slipped alongside US treasury yields on Friday as rising tensions between Russia and Ukraine meant for a run on riskier assets and currencies including the likes of AUD, NZD, NOK and SEK. The situation on the Russia/Ukraine border will likely continue to dominate headlines and drive risk sentiment in financial markets, at least in the short-term amid a lack of any significant economic releases.  Investors are looking ahead to next Wednesday’s Federal Reserve meeting for a signal on rate hike expectations. The US Dollar Index was down 0.12%, trading at 95.62 at the time of writing.

Key Movers

GBPUSD edged lower after UK retail sales printed much weaker than market expectations, a big miss but one that can be partly explained away by Omicron, according to some analysts. However it's unlikely to prevent the Bank of England from holding back on tightening monetary policy. Investors are increasingly pricing in the chance of a UK central bank rate hike to 0.5% on February 3rd. The euro climbed against the dollar amid USD weakness, up 0.31% trading around 1.13451 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4101 - 1.424 ▲
  • GBP/CAD: 1.697 - 1.7039 ▲
  • AUD/CAD: 0.9001 - 0.9057 ▼
  • USD/CAD: 1.2458 - 1.2549 ▲