Yesterday’s Federal Open Market Committee meeting minutes left the ‘Loonie’ languishing in the region of a six-week low against the US Dollar. The commodity-driven asset also weakened against several of its other most traded peers (including the Pound) ahead of today’s domestic retail sales report.
The Canadian Dollar Exchange Rate was in the region of 0.6109 against the British Pound as of 14:25 GMT
Declines were extended after the domestic data revealed that retail sales contracted by more than expected in June.
Economists had forecast that Canadian retail sales would dip by 0.4 per cent in June, month-on-month, after rising by 1.9 per cent in May.
However, sales actually dropped by 0.6 per cent. Although they were up by 3.1 per cent year-on-year, this is yet another concerning sign of a slowdown in the Canadian economy.
Before the figures were published macro-strategist Mazen Issa commented: ‘There are GDP implications for retail sales, so I think people may draw a little bit more from it today. You will get some more downward pressure on the Canadian Dollar.’
The CAD/GBP exchange rate hit a low of 0.6073
As the volume of sales (excluding price changes) fell 1.2 per cent this data could be a real drag on Canadian growth.
In other disappointing news, the number of Canadian’s claiming unemployment support climbed in June, with regular beneficiaries rising by 0.9 per cent (4,520). The number of beneficiaries was down by 6.4 per cent from a year ago.
After the data was published the Canadian Dollar fluctuated against the Pound and hit a low of 0.9525 US cents against the ‘Greenback’.
Chief economist David Watt noted: ‘This is the third straight significant miss on the June activity numbers, setting us up for next week’s June GDP and second-quarter GDP numbers, and obviously the Canadian economy stumbled pretty significantly at the end of the quarter.’
‘Loonie’ declines against the US Dollar were exacerbated by the news that US jobless claims dropped to a five-year low.
With UK GDP data and Canadian inflation reports due for publication tomorrow additional CAD/GBP movement is likely to occur before the weekend.
Current Canadian Dollar (CAD) Exchange Rates:
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9521 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7143 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6109 –
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0558 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.2137 >
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6370 –
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0511 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3975 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8218 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9473 >
(Correct as of 14:25 GMT)
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