Will Retail Sales Boost The Canadian Dollar?

  


The Canadian dollar is almost unchanged on Wednesday, although it’s a busy day ahead, as Canada releases and the Federal Reserve holds its policy . In the European session, is trading at 1.2406, up 0.05% on the day.

Retail Sales expected to climb sharply

Canada releases Retail Sales for February, later in the day (12:30 GMT). The consensus is for a banner report, which could give a lift to the Canadian dollar. Headline retail sales is projected to rise 4.0%, while is expected to climb 3.7%. Both indicators have shown two straight declines, so strong gains would indicate a sharp rebound in consumer spending, a key driver of economic growth.

Following the Canadian Retail Sales reports, investors will shift their focus to the Federal Reserve, as the FOMC will wind up its policy meeting and deliver a rate statement (18:00 GMT). The US economy continues to release strong economic data, which shows that the recovery is gaining traction. Fed officials will likely acknowledge the brighter economic picture, but investors shouldn’t expect any change in the Fed’s ultra-accommodative policy.

The market appears to have internalized the Fed’s steady message that even though inflationary pressures are growing, QE will continue at its current level of at least USD120 billion each month. In follow-up comments to today’s meeting, Fed Chair Powell is likely to wax positive about the economy but at the same time reiterate that more progress is needed before the Fed can consider a taper of QE. Unless the Fed surprises with a more hawkish rate statement than expected, it should be “business as usual” after the meeting, which means that the US dollar could find itself under pressure from the major currencies.

USD/CAD Technical

USD/CAD Daily Chart
  • On the upside, there is resistance at 1.2600. Above, there is resistance at 1.2723
  • USD/CAD continues to test support at 1.2407. This is followed by support at 1.2337

Original Post

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Read more here