Canadian Dollar Plummets on Poor Retail Sales
Dean Popplewell | Oct 20, 2017 09:38
Canadian retail sales unexpectedly fell in August due to the biggest month-over-month drop in purchases of food and beverages in three-years.
Headline retail sales fell -0.3%. Market expectations were looking for a strong +0.5% gain. On a year-over-year basis, retail sales rose +6.9%.
Ex-autos, retail fell by a steep -0.7%.
The loonie has taken it on the chin, as the ‘big’ dollar rallied immediately from just below the C$1.25 handle to touch C$1.2573, the first real resistance point for the dollar.
Stronger headline numbers would have improved the odds of the Bank of Canada (BoC) raising rates before the end of 2017. Today’s print should take the BoC out of the rate hike equation for the time being. The BoC meet next Wednesday, Oct 25.
Canada inflation
Canada’s annual inflation rate accelerated higher in September for a third consecutive month, supported by a surge in gas prices due to the impact of Hurricane Harvey stateside.
The headline CPI rose +1.6% y/y, following a +1.4% advance in the previous month. Market expectations were looking for a +1.7% advance. On a month-over-month basis, CPI rose +0.2%.
Note: Core inflation, edged upward to +1.6%, or an eight-month high.
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