USDCAD in focus on Canada CPI data

20 November,, Lagos – The week is set to end on a quiet note, as the inflation report from Canada remains the only high impact data release on the calendar. We also have European Central Bank president Mario Draghi scheduled to deliver a speech this morning at the Euro Finance Week, in Frankfurt.

The markets have been more consolidating in recent times, with no clear trends. As the week ends, it is expected that key reports next week could serve as a catalyst for a resumption of momentum.

UK retail sales

The strong performance of clothing and food sales in September failed to be carried over into the following month as UK retail sales in October fell below forecast, dragged down by the same clothing and food sales.

The UK retail sales figure was disappointing, recording a dip in performance between September and October with sales excluding fuel dropping by 0.9 percent. This marked the lowest rate this year so far as total sales fell by 0.6 percent. The sterling ended the day higher against the USD despite the weak retail sales figure, as the GBPUSD looks set to end a second week on a high.

Canada CPI (1:30 A.M GMT)

Canada will release its core CPI m/m and CPI later today. Last month’s figures showed core CPI remained flat, while the CPI edged down to -0.2 percent. Core retail sales m/m remained flat at 0.0 percent, while retail sales beat expectation to come at 0.5 percent, rising for the fourth consecutive month. The increase was led by higher sales of motor vehicle and parts dealers.

The core retail sales m/m (ex automobiles) figure is also scheduled to be released, forecast to come at -0.3 percent, depicting the weakness in consumer spending and potentially the lowest reading since June. The retail sales m/m is forecast to come at 0.1, still a potential drop from previous months. Considering the extended weakness in the Canadian dollar, it will take a string of positive data to reverse this trend.

The USDCAD pair will be closely watched as it seems to be in retracement from the bullish trend.

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