Canadian Dollar Demonstrates Strong Gains, Ignoring Domestic Data

The Canadian dollar demonstrated big gains against its major rivals today, even against the very strong US currency. The loonie managed to rally even though domestic macroeconomic data was not particularly good.

Canada’s retail sales grew 0.5 percent in August from July, beating analysts’ expectations. Yet the big negative was the core part of the indicator, which excludes volatile automobile sales. It was flat while markets had counted on a 0.2 percent increase.

Yet the Canadian currency managed to gain even against the strong greenback, let alone the vulnerable euro. The probable reason for the currency’s resilience was the rally of crude oil prices.

Now, traders wait for another important piece of economic data from Canada — namely, the inflation report. Experts predict that it will show accelerating consumer inflation but deflation in its core components.

USD/CAD dropped from 1.3138 to 1.3092 as of 21:13 GMT today. EUR/CAD sank 2.4 percent from 1.4896 to 1.4540 to trade at the lowest since August 19. CAD/JPY 1 percent from 91.25 to 92.15.

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