US retail sales, BOC rate decision and more

12 April, AtoZForex, Lagos – UK inflation is again showing signs of revival as the Consumer Prices Index (CPI) rose by 0.5% in the year to March 2016, compared with a 0.3% rise in the year to February. The rate has increased gradually since October 2015 although still quite low, relative to the policy makers’ 2% target. According to the report from the Office of National statistics (ONS), the upward pressures were partially offset by a fall in food prices and a smaller rise in petrol prices than a year ago. The pound strengthened after the report, and is looking to remain bullish against most of its other counterparts.

It is a big day ahead for both the US dollar and the Canadian Dollar. From the US, we have the retail sales data, as well as the producer manufacturing index data. From Canada, we have the Bank of Canada Monetary Policy Report along with the overnight rate.

US retail sales (12:30 P.M GMT)

Major focus will be on the US retail sales data. Considering the Fed’s latest series of dovish comments, and relative downbeat outlook on the economy, data like the US retail sales will be closely watched, to access the level on consumer spending. Along with the Consumer price index due on Thursday, which will give a picture on the inflation situation. The retail sales is forecast to come at 0.1%, while the total value of sales at the retail level, excluding automobiles (core retail sales) is forecast to come at 0.4%. The producer price index also due at the same time is forecast to show a change in the price of finished goods and services sold by producers at 0.3%. The Crude Oil Inventories is forecast to show a rise from last week of 900k barrels of crude oil held in inventory by commercial firms.

Bank of Canada rate decision

Having held rates at 0.5% since July, 2015, after cutting rate twice last year to stimulate growth, the BOC is likely to maintain rates at current levels. In January, the Canadian central bank lowered its economic growth projection for this year to 1.4% in January. The BOC will most likely now wait for the federal budget’s fiscal measures this month, before determining its next course of action. On Friday, we also have the Manufacturing Sales m/m data due for release. The Canadian dollar is expected to remain strong, with the USDCAD edging further down after the CAD found renewed strength on Friday following the impressing employment report.

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