Canada data releases punch CAD for a loss

John Hardy

Head of FX Strategy

Weak Canadian data puts CAD back on defensive. CAD is towards the day’s lows against the US dollar after the key Canadian data releases today, showing March Retail Sales ex Autos at an ugly -0.2% month-on-month despite the strong +0.6% headline growth. 

The April CPI was mostly in-line, with the core and “trim” matching expectations at +1.9%/+2.1%, but the headline missed slightly at 2.2% vs. 2.3% expected. Today’s data set perhaps marginally lowers the odds that the Bank of Canada moves ahead with a rate hike at the next meeting on May 30, which was priced before the data at about 33% likely.

USDCAD chart:
USDCAD looks ready to join the other USD pairs in rallying if the pair can clear the 1.3000 area that recently provided resistance at the top of the range and has a long history as a pivot zone. Working against CAD bears has been the very high oil prices, but these look severely overbought. We are on the lookout for testing 1.3000+ on a strong close near 1.2900 or higher today. 
(Chart Source: Saxo Bank)

Enlarge

You can access both of our platforms from a single Saxo account.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)