Canadian retail sales lower than forecast - CAD little interested
Retail sales in Canada rose by 0.4% in July, but taking out gas and auto sales, the month recorded a fall of 0.1%, giving a negative slant to the data. The markets were looking for a 0.6% rise in the headline, and +0.3% in ex-autos so headline chasers will look to sell the CAD on this. That said, the data is from July, so this is a little too far back to have much bearing going forward.
As we have seen this week, the USD/CAD rate made a play for 1.3300+ but was rejected - as it has done a number of times this week. The latest upturn is again showing a lack of conviction, and we will need a more committed move in the USD if we are going to extend on the weekly highs.
This can be said for the FX majors in general, though looking at the AUD and NZD, we can see the fresh weakness is pulling AUD back towards the lows, while NZD has matched its cycle base this morning and is still looking to grind out fresh levels for 2019. In light of this, we may see some contagion selling of the CAD, but as noted already, genuine selling interest may be too much to fight against in the current market.