USD/CAD gains further to near 1.3750 after downbeat Canadian Retail Sales data for May.
Canadian Retail Sales contracted at a faster-than-expected pace, boosting BoC’s subsequent rate-cut prospects.
The US Dollar rises as prospects of Trump’s victory in the US presidential elections improve.
The USD/CAD pair climbs to near 1.3750 in Friday’s American session. The Loonie asset strengthens as weak Canadian Retail Sales for May add to triggers pointing to subsequent rate cuts by the Bank of Canada (BoC), and the US Dollar (USD) strengthens on expectations that Donald Trump will win the United States (US) presidential elections.
Statistics Canada showed that monthly Retail Sales contracted at a faster pace by 0.8% than estimates of 0.6%. Receipts at retail stores grew by 0.6% in April, downwardly revised from 0.7%. Retail Sales, excluding automobiles, declined sharply by 1.3% from expectations of a 0.5% cut, suggesting poor demand for core goods.
Canadian Retail Sales, a key measure to consumer spendings, indicate that households struggle to bear the consequences of BoC’s higher interest rate. This would open doors for further policy easing, which is an unfavorable scenario for the Canadian Dollar.
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