USD/CAD: Canadian Dollar Reacts To Retail Sales

 | Nov 23, 2017 11:21

The Canadian dollar has ticked higher in the Thursday session. Currently, USD/CAD is trading at 1.2679, down 0.13% on the day. On the release front, Canada releases retail sales reports. Retail Sales and Core Retail Sales are both expected to rebound to 0.9% in September, after posting declines a month earlier. U.S. banks are closed for the Thanksgiving holiday, and there are no U.S. events on the schedule.

The Federal Reserve released the minutes of its most recent meeting on Wednesday. Policymakers expect the U.S. economy to continue showing strong growth, and predicted that interest rates will be raised in the “near term.” Although policymakers did not provide further hints about the timetable of a rate hike, the markets remain convinced that additional rates are imminent. The odds of a rate hike in December are 91%, and the odds of a January raise are at 89%.

The NAFTA trade agreement appears in trouble, which could bode badly for the Canadian economy. A fifth round of talks over NAFTA failed to lead to significant progress, prompting the U.S. to send an ominous warning to Canada and Mexico. The U.S. wants to raise the North American content of vehicles from 62.5% to 85% and require that 50% of content come from the U.S. As well, the U.S. wants to put restrictions on Canadian and Mexican agriculture. Unsurprisingly, Mexico and Canada have rejected these proposals. Negotiators are hoping to wrap up a new deal by March 2018, but the U.S. chief negotiator warned that “absent rebalancing, we will not reach a satisfactory result.”

USD/CAD Fundamentals

Thursday (Nov. 23)

  • 8:30 Canadian Core Retail Sales. Estimate 0.9%
  • 8:30 Canadian Retail Sales. Estimate 0.9%

USD/CAD for Thursday, Nov. 23, 2017