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BillyR

Canadian Dollar Slumps after Inflation

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The Canadian Dollar reversed course and slumped during the noon session Friday after data showed a surprise contraction in the value of Canadian retail sales at the end of the first-quarter and a minor fall in April inflation.

This has overshadowed the rising oil prices, which are now at multi-year highs, and optimism over a deal to save the North American Free Trade Agreeement that had previously supported the currency.

Statistics Canada data showed "core" Canadian retail sales, which exclude automobiles from the figures, contracting by -0.2% during March when markets had been looking for them to rise by 0.5%.

Total retail sales rose by 0.6% during the month, much faster than the 0.3% growth forecast, but this number includes sales of large ticket items like cars that are excluded from the "core" figure given their distortionary effect on underlying trends.

May-19-GBP-CAD-Conversion.png

"Canadian retailing moved higher after a few flat months late last year and in early 2018, although you had to be selling cars to feel that lift in March. Overall retail sales climbed 0.6%, but strip out auto dealers, and sales came in well below consensus with a 0.2% decline," says Avery Shenfeld, chief economist at CIBC Capital Markets. 

Right now 1 gbp to cad is 1,7317

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