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Canadian Dollar Higher After Upbeat Retail Sales

05:21, 22nd July 2016

(RTTNews) - The Canadian dollar climbed against the other major currencies in European deals on Friday, as data showed that the nation's retail sales grew more than expected in May.

Data from Statistics Canada showed that retail sales increased 0.2 percent on a seasonally adjusted monthly basis in May, higher than forecasts for a flat reading. This follows a 0.9 percent gain in June.

Core retail sales, excluding motor vehicle and autos, improved 0.9 percent, beating expectations for a 0.3 percent rise. In July, the core retail sales surged up by 1.3 percent.

Separate data showed that Canada's consumer prices increased 0.2 percent month-on-month on an unadjusted basis in June, in line with expectations. This was slower than July's 0.4 percent growth.

Core inflation was flat on month - also unchanged from expectations and follows a 0.3 percent uptick in May.

Meanwhile, crude oil futures were stuck below $45 a barrel amid speculation that Libya and Nigeria are ramping up production.

Traders will be paying attention to Baker Hughes report on U.S. rig counts.

The loonie was lower in Asian deals, as fading stimulus expectations and falling crude oil prices dampened investor sentiment.

The loonie rebounded from an early 11-day low of 1.3139 against the greenback, edging higher to 1.3056. On the upside, the loonie is likely to find resistance around the 1.28 zone.

The loonie advanced to 1.4381 against the euro, following a 9-day decline to 1.4494 at 4:30 am ET. The loonie is seen finding resistance around the 1.42 level.

Flash survey data from Markit showed that Eurozone private sector expanded at the weakest pace in one-and-a-half-years in July.

The flash composite output index fell to 52.9 in July, an 18-month low, from 53.1 in June. Nonetheless, the score was above the expected level of 52.5.

Reversing from an early 8-day low of 80.58 against the Japanese yen, the loonie climbed to 81.32. Further uptrend may lead the loonie to a resistance near the 85.00 mark.

Flash survey data from Markit showed that Japan's manufacturing sector contracted again in July but the pace of deterioration slowed.

The manufacturing Purchasing Managers' Index rose to 49 in July from 48.1 in June.

The loonie, haven fallen to a 3-day low of 0.9820 against the aussie at 2:45 am ET, reversed its course and strengthened to 0.9766. The next possible resistance for the loonie may be found around the 0.965 region.

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