Canadian Dollar Extends Rally After Strong Retail Sales Data
The Canadian dollar extended its early advance against the other major currencies in European deals on Friday, as Canadian retail sales accelerated at a faster pace in January.
Data from Statistics Canada showed that retail sales rose a seasonally adjusted 2.1 percent in January following a revised 2.1 percent fall in December. Economists were looking for a 0.6 percent gain.
Core retail sales, excluding motor vehicle and parts dealers, surged up by 1.2 percent, higher than the expected 0.4 percent increase. In December, the core retail sales fell by 1.7 percent.
Meanwhile, separate data showed that consumer price inflation rose a non-seasonally adjusted 0.2 percent in February, same as the January estimate. Economists had forecast the index to rise to 0.4 percent.
The Bank of Canada's core consumer price index improved to 0.5 percent in February from 0.3 percent in January. The reading came in line with forecasts.
The loonie has been already supported by rising appetite, amid higher commodity prices and a weaker euro, which paused rally after soft German inflation and the European Central Bank's executive board member Peter Paret remarks that further rate reduction remains possible.
The loonie held steady against most major rivals in Asian deals.
The loonie climbed to an 8-day high of 1.4588 against the euro, compared to yesterday's closing value of 1.4685. The loonie is seen finding resistance around the 1.44 zone.
Data from Destatis showed that Germany's producer prices declined at a faster-than-expected pace in February.
The producer price index fell 3.0 percent year-over-year in February, exceeding economists' expectations for a 2.6 percent decrease.
The loonie appreciated to 1.2923 against the greenback, a level unseen since October 2015. The next possible resistance for the loonie may be found around the 1.28 mark.
Reversing from an early low of 0.9961 against the aussie, the loonie strengthened to an 11-day high of 0.9867. At yesterday's close, the pair was worth 0.9922. Continuation of the loonie's uptrend may lead it to a resistance around the 0.97 area.
The loonie firmed to a 1-1/2-month high of 86.28 against the Japanese yen, from yesterday's closing value of 85.83. The loonie is likely to target resistance around the 88.00 level.
Minutes from the Bank of Japan's January meeting showed that members of the board implemented a policy of negative interest rates in order to spur the fight against deflation.
The members added that downside risks included low oil prices, plus weakness from commodity exporters.
Looking ahead, the University of Michigan's preliminary U.S. consumer sentiment index for March are slated for release in the New York session.
At 2:00 pm ET, Federal Reserve Bank of St. Louis President James Bullard is expected to speak at the International Research Forum on Monetary Policy in Frankfurt.
The material has been provided by InstaForex Company - www.instaforex.com
