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Retail sales and inflation bears down on the Canadian Dollar

In a week were UK retail figures startled, Canada’s core retail reading did the polar opposite falling from 0.8% in June to -0.8 in July. The figure which was viewed as a real negative due to the retail sectors assistance with the Canadian economy. The data release saw the Canadian dollar tumble against the majority of the majors.

The core retail figures were accompanied by further data from Canada including Core CPI which remained flat against expectation remaining at 2.1 % for the third successive month.

The final release was Canada’s Retail sales which showed that that sales had dropped to a consumer as sales had shrunk-0.1% against predicted growth of all sales fell in seven of eleven key sales categories.

Inflationary data demonstrated that annual inflation had slowed from 1.5% previously to 1.3% in July showing Canada was still quite a gap away from its target of 2%. The fall in inflation stemmed from cheaper energy prices including Gas and Petrol. Petrol in particular has fallen around 14% in last year. Whilst contrarily rent and food prices rose.

The poor data saw the Looney close at 0.7824 against the US Dollar, 0.6861against the Euro and 0.5940 against the GBP.

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