The Canadian dollar is slightly weaker today after weakening yesterday. Yesterday, monthly retail sales missed estimates by a wide margin, suggesting that the Canadian economy continues to slow. While average estimates called for an expansion of 0.9%, actual growth was only 0.1%. This was the last data point before GDP growth figures are announced. As growth slows and inflation remains below the Bank of Canada's targets, future rate hikes are looking less likely. On the plus side, the loonie remains supported thanks to an ongoing bull market in crude oil. Our outlook on the Canadian dollar remains neutral.
The USD/CAD exchange rate is currently above 1.2720. The euro is up against the Canadian dollar. EUR/CAD is currently above 1.5080. Lastly, the pound is up against the Canadian dollar, with GBP/CAD trading above 1.6950.
This is a fairly light week for the Canadian dollar in terms of economic data releases. Retail sales for September widely missed estimates (0.1% vs. 0.9% expected). Last week, the Canadian dollar sold off after meeting CPI estimates.
As the Canadian dollar gains from weakness in USD, we are upgrading the currency to neutral in the short-term. Looking at various technical indicators on a daily chart of the Canadian dollar, the currency is now trading within normal conditions.
As the Canadian dollar benefits from strong crude prices, we are upgrading the currency to neutral in the medium-term. Looking at a weekly chart, the currency is trading within normal conditions. This is based on various technical indicators on the Canadian dollar currency index.