Canadian inflation ticks up to 1.5%, but retail sales fall in Jan
It seems the CAD has responded to the Jan retail sales number, which has fallen 0.3% against expectations of a 0.4% rise. However, core retail sales rose 0.1%, though this was also off consensus of 0.2%.
The main release, however, was inflation, and the headline rate came in at 1.5%, which was a tenth higher than the 1.4% expected. Trimmed CPI was higher at 1.9%, with the median and common rates both at 1.8%. The BoC looks at all the measures as the headline includes oil price volatility.
We saw USD/CAD push up through 1.3400 on the releases, and this was being threatened ahead of the data. Traders will now be looking at the early March highs just above the 1.3450 level, which should serve to put a near term top in place until we get fresh drivers for the market.
US equity markets have an impact on CAD, as they do on the AUD and NZD, so we watch for how the major indices perform and any weakness here will also add to pressure on the CAD later today.
Oil prices are stuttering at recent highs also. Recall earlier in the week, we noted WTI resistance above the $60 mark, and prices have stalled here in recent sessions, though we continue to trade on a $59 handle for now.