News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
USD/CAD Rips Higher After Disappointing CPI and Retail Sales Data

USD/CAD Rips Higher After Disappointing CPI and Retail Sales Data

Kevin Jin,

THE TAKEAWAY: CAD Consumer Price Index (May) (YoY) > +0.7% versus +0.9% expected, from +0.4% > USDCAD BULLISH

A slew of Canadian data was released at 8:30 EDT / 12:30 GMT, which included May CPI figures and April retail sales numbers. All these figures were disappointing and led to a continued sell-off in the CAD. Bank of Canada CPI Core (May) (YoY) came in at +1.1% versus +1.2% expected (Bloomberg News survey), from +1.1% last month. Consumer Price Index (May) (YoY) was +0.7% versus +0.9% expected (Bloomberg News survey), from +0.4%. Lastly, April retail sales numbers also missed: +0.1% actual; +0.2% expected (Bloomberg News survey); 0.0% prior).

The poor Canadian data in combination with hints at earlier QE tapering in the US has spurred large gains in the USDCAD in the last three trading days. The poor CPI data and retail sales figures signal a slowing Canadian economy. Canadian trade is heavily dependent upon the US as the US is the destination of roughly 75% of Canadian exports. The Canadian economy is largely correlated to commodity prices and the heavy recent declines in commodites offer little saving grace.

USDCAD 1-minute Chart: June 21, 2013

USDCAD_Rips_Higher_After_Disappointing_CPI_and_Retail_Sales_Data_body_Picture_1.png, USD/CAD Rips Higher After Disappointing CPI and Retail Sales Data

Charts Created using Marketscopeprepared by Kevin Jin

The 1M chart above shows little price action in the USDCAD through most of London hours. The USDCAD slowly crept its way up to $1.0400 before meeting small resistance. However, the pair easily broke through 1.0400 support after the bearish Canadian CPI and retail sales numbers were released. The move was a tremendous +75 pips (+0.76%) in about 15 minutes, at the time of writing. This upside move marks the highest level for the USDCAD since November 28, 2011.

--- Written by Kevin Jin, DailyFX Research

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

DISCLOSURES