The Canadian dollar weakened today against the US dollar and the Japanese yen after the reports showed that the inflation increased less than predicted and the core retail sales unexpectedly dropped. The currency advanced against the euro.
The consumer prices index rose 0.3 percent in April, on a seasonally adjusted monthly basis, following the 1.1 percent increased in March. Analysts predicted the 0.5 percent growth. The retail sales were unchanged at $37.3 billion in March. The core retail sales (the retail sales excluding automobile sales that have a very big impact, but tend to be very volatile) decreased 0.1 percent. They there expected to maintain their growth rate of 0.8 percent.
Many investors question whether the Canadian central bank, that was first among the Group of Seven nations to start increasing interest rates after the financial crisis, will resume raising lending rates. The current economic situation provides an unpleasant answer as the weakening economy doesn’t give reason for the bank to become more hawkish.
USD/CAD closed at 0.9738, rising from 0.9673, while CAD/JPY closed at 83.81, falling from 84.28. EUR/CAD opened at 1.3842 and closed at 1.3789.
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