Connect with us

Economics

CAD extends losses, retail sales next

The Canadian dollar is in negative territory for a fourth straight day. In the European session, USD/CAD is trading at 1.3522, up 0.24% on the day. The…

Share this article:

Published

on

This article was originally published by Market Pulse

The Canadian dollar is in negative territory for a fourth straight day. In the European session, USD/CAD is trading at 1.3522, up 0.24% on the day.

The US dollar continues to shine, particularly against risk-sensitive currencies such as the Canadian dollar. USD/CAD has jumped 1.9% this week and the Canadian dollar has fallen to lows last seen in July 2020. Risk sentiment has eroded due to the escalation in the Ukraine war. The regions occupied by Russia are holding a referendum to join Russia, and no one has any doubt about the results. Russian President Putin has hinted that he could resort to nuclear weapons to defend “Russian territory” and he has also ordered a partial mobilization, as Ukraine presses on with an impressive counter-offensive. The energy crisis in Europe continues to brew – the Nordstream 1 pipeline has been out of service for several weeks, and Western European countries could face energy shortages, with winter only a few months away.

Markets brace for soft retail sales

Canada releases the July retail sales report later today. The markets are braced for a sharp downturn in consumer spending. The headline reading is expected at -2.0%, following a gain of 1.1% in June. Core retail sales is expected to fall by 1.8%, after a 0.8% gain in June. A sharp downturn could sour investors on Canada’s economic outlook and extend the Canadian dollar’s losses.

Canada’s headline and core inflation indicators fell in August and were lower than expected. It’s still early to declare that inflation has peaked, but the BoC can declare a job well done if inflation is indeed falling. The BoC has been aggressive, delivering a 75bp increase earlier this month and bringing the benchmark to 3.25%. The markets have priced in a 50bp at the October meeting, followed by a modest 25bp hike in December. That would lift rates to an even 4.00%, which would be the highest since 2008, during the GFC.

.

USD/CAD Technical

  • USD is testing resistance at 1.3529. The next resistance line is 1.3615
  • There is support at 1.3414 and 1.3274

dollar
inflation
markets
us dollar

Share this article:

Economics

Carnival Shares Crash As Cruise Rebound Sinks

Carnival Shares Crash As Cruise Rebound Sinks

Carnival Corp. shares crashed Friday morning as fuel prices and inflation delayed its return…

Share this article:

Continue Reading
Economics

Setting Our Sights for 2023

John Jagerson here.
The one positive aspect of a bear market is that valuations are low. As long as traders can focus on the underlying fundamentals and…

Share this article:

Continue Reading
Economics

Europe’s Inflation Rate Hits A Record 10%

Inflation across the European Union has reached a record high of 10%.

The latest data from Eurostat shows that inflation in the Euro zone climbed to an…

Share this article:

Continue Reading

Trending