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Loonie Tumbles As Canadian February Retail Sales Unexpectedly Fall

Loonie Tumbles As Canadian February Retail Sales Unexpectedly Fall

Tzu-Wen Chen, Technical Strategist

THE TAKEAWAY: [Canada retail sales unexpectedly decline for first time in seven months] > [Decline led by auto] > [CAD weakens against USD]

Canadian retail sales unexpectedly declined in February for the first time in seven months on disappointing auto sales, reversing the rebound seen in January after sales stagnated in December. Ottawa-based Statistics Canada reported today that sales fell by 0.2 percent in February, while January’s figures were revised downwards to 0.2 percent from the 0.5 percent originally reported. The median forecast of economists surveyed by Bloomberg News had called for month-on-month growth of 0.1 percent, while sales excluding autos had been projected to rise by 0.6 percent.

The decline in retail sales was led by motor vehicles and parts dealers, which fell by 2.4 percent. Food and beverage stores registered the second straight month of decline, edging down 0.2 percent. Meanwhile, building material and garden equipment sales recorded the largest gain, rising 2.2 percent, while sales at gasoline stations rose by 1.7 percent, reflecting higher gasoline prices.

USDCAD 1-minute Chart: April 24, 2012

Loonie_Tumbles_As_Canadian_February_Retail_Sales_Unexpectedly_Fall_body_Picture_2.png, Loonie Tumbles As Canadian February Retail Sales Unexpectedly Fall

Chart created using Strategy Trader – Prepared by Tzu-Wen Chen

The Canadian dollar tumbled against the U.S. dollar on the disappointing retail sales figures, falling 19 pips against the greenback in the first few minutes after data release. The loonie continued to lose ground, and at the time of this report, the USDCAD pair was trading at C$0.9918.

--- Written by Tzu-Wen Chen DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.