CAD Wholesale Sales Increased 1.5% In September

CAD Wholesale Sales (Sep) Actual 1.5%, Expected -0.5%, Previous -1.5%

Release Explanation: Measures the total value of sales at the wholesale level. A rising trend has a positive effect on the nation's currency because increased sales at the wholesale level are a good indication that there is high consumer demand at the retail level.

Trade Desk Thoughts: According to Statistics Canada, Wholesale Sales increased 1.5% to $46.3 billion in current dollars in September. A partial recovery in the automotive sector, which posted a large decline in August, was a significant factor behind the increase in September. After removing the impact of price changes, sales in volume terms rose 1.0%.

September's increase in wholesale sales was the seventh in nine months, and follows a period of little or no growth that began in the spring of 2007. Sales of automotive products rose 6.0% in September to $7.4 billion, erasing almost half of the decline posted in August. The increase was the result of a large jump in sales of motor vehicle parts and accessories (+10.5%), as well as a rise (+4.7%) in the motor vehicles trade group. Despite the increase in September, the automotive sector was the only one to register lower sales on a year-over-year basis. Excluding the automotive sector, wholesale sales rose by 0.6% in September.

"There was a nice surprise here to the upside but it might be the last for a while," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "It would be hard to imagine that automotives will make a similar contribution going forward given the current economic circumstances."

Forex Technical Reaction: Crude futures have already declined just over 6% so far today and the cad has been rising as a result.

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