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USDCAD above 1.34 after mixed messages from CAD data

14:51 22 March 2019

Summary:

  • Canadian inflation ticks higher

  • But core retail sales disappoint

  • USDCAD move back above the 1.34 handle

 

The main economic releases of this afternoon come from Canada, with the latest inflation data beating forecasts but consumer spending softening which has sent mixed messages for the USDCAD as the pair moves back above the 1.34 handle. The CPI Y/Y rose by 1.5% in February, up from a previous reading of +1.4% and above the 1.4% consensus forecast. In terms of a core reading, traders look to 3 separate measures which came in as follows:

 
  • CPI common Y/Y: +1.8% vs +1.8% exp and 1.9% prior

  • CPI core Y/Y: +1.8% vs +1.8% exp and 1.8% prior  

  • CPI trim Y/Y: +1.9% vs +1.8% exp and 1.9% prior

 

On balance these could be seen as mildly positive for CAD with the trim beating forecasts in remaining at 1.9%, but overall there isn’t much new to go on here.

There was little real change in the Canadian inflation metrics on the whole, with the average of the 3 core CPI measures still near the middle of the BoC’s 1-3% inflation target. Source; XTB Macrobond

 

At the same time as the inflation figures there was the most recent retail sales date out, with an unexpected drop of 0.3% M/M seen in January.This was well below the +0.4% expected and there was also a negative revision to the prior release which now stands at -0.8% after -0.7% initially.  A core reading which strip out car sales, came in at 0.1% M/M as expected, but the prior month was revised lower to -0.8%. The revisions here make the latest releases worse than they appear and on the whole it’s a bit of a disappointing update on the consumer.

Retail sales have dipped lower in the latest release with consumer spending falling quite sharply in the past couple of years. Source: XTB Macrobond

USDCAD is moving firmly higher for the second consecutive day, but the gains have come more from a strength in the former than a weakness in the latter. 23.6% fib at 1.3453 could now be in the sights of longs. Source: xStation

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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