Thu, Sep 29, 2022 @ 07:12 GMT
HomeContributorsFundamental AnalysisLoonie Plummets on Weak Data

Loonie Plummets on Weak Data

Data this morning showed that Canada’s annual inflation rate slowed slightly last month, but remained above the Bank of Canada’s (BoC) +2% inflation threshold for a third consecutive month.

Canada’s CPI rose +2.2% on year-over-year basis in April. Today’s headline print was just shy of the markets expectation of +2.3%. On a month-over-month basis, prices climbed +0.3% in April.

Digging deeper, the BoC’s preferred gauge – average core inflation – rose on a 12-month basis to +2.03%, the highest level in nearly six-years.

Canada Retail Sales Climb

Canadian retail sales rose for a third consecutive month in March, beating market expectations.

March retail sales rose +0.6% m/m, on a seasonally adjusted basis to C$50.24B. The consensus was looking for a +0.3% gain. On a price-adjusted, or volume, basis, retail sales increased by a higher +0.8% in March.

Stats Canada also revised both January and February prints a tad higher to +0.3% (+0.1%) and +0.5% (+0.4%) respectively.

Digging deeper, sales rose in six of 11-subsectors, led by a 3.3% advance at new-car dealers. However, ex-autos, retail sales declined -0.2%.

Going forward

Due to higher interest rates and new mortgage financing rules, introduced last January, Canadian households are expected to pare back their spending habits to service their increasing debt loads.

The CAD (C$1.2895) has come under considerable pressure, paring back all of this week’s gains, and about to tackle the psychological C$1.2900-20 level where there is some initial interest to buy the loonie.

MarketPulse
MarketPulsehttps://www.marketpulse.com/
MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading