By CountingPips.com
The Canadian “loonie” dollar has been on the defensive today in forex trading as news released showed that Canadian retail sales fell unexpectedly in the month of July. Retail sales decreased by 0.1 percent to C$35.9 billion following no change in sales for August, according to the monthly report released by Statistics Canada today. The fall in retail sales was unexpected as economic forecasts were predicting a 0.6 percent increase for the month.
Core retail sales, excluding automobile sales, declined by 0.4 percent in July following a decline of 0.6 percent in June.
Contributing to the slide in the retail sales numbers was a decrease in furniture, home furnishings & electronic stores by 8.4 percent in July. Electronic and appliance stores also had a declining month with a decrease of 4.9 percent while building material & garden equipment & supplies fell for a fourth straight month with a decrease of 2.3 percent. Positively contributing to the monthly retail sales report was an increase at general merchandise stores by 2.4 percent.
Canada’s Leading Indicators rise in August.
A separate report from Statistics Canada showed that the Leading Indicators index increased by more than expected in the month of August. The Leading Indicator Index, which measures future economic activity, rose by 0.5 percent in August following an increase of 0.4 percent in July. Market forecasts were expecting a 0.3 percent advancement.
Boosting the leading indicator index in August was an increase in new orders for durable goods by 5.2 percent. The business and personal services employment indicator rose by 0.4 percent while the US conference Board leading indicator also increased by 0.4 percent. On the downside, the housing index fell for fourth straight month and declined by 4.0 percent in August.
Canadian dollar falls in currency trading.
The Canadian dollar has been trading lower today in the currency markets following today’s disappointing retail sales data. The Canadian dollar also known as the “loonie”, has lost ground verses the U.S. dollar, euro, British pound, Japanese yen, Australian dollar and the New Zealand dollar.
USD/CAD Forex Chart – The US dollar has gained against the loonie from today’s opening exchange rate of 1.0241 to trading at 1.0319 this afternoon in the US trading session at 1:56pm ET. The American currency had fallen for two straight days against the Canadian currency before today’s turnaround.
