Loonie Declines After Tame Canada Inflation Data, Dismal Core Retail Sales
18 Mayo 2018 - 4:58AM
RTTF2
The Canadian dollar fell against its major counterparts in the
European session on Friday, as the nation's consumer inflation held
steady in April, while core retail sales fell unexpectedly in
March.
Data from Statistics Canada showed that consumer prices climbed
0.1 percent on a seasonally adjusted monthly basis in April, the
same rate of increase as seen in March.
Economists had expected the index to rise by 0.3 percent.
On year, the consumer price index rose 2.2 percent in April,
following a 2.3 percent increase in March.
Separate data showed that core retail sales fell 0.2 percent
following a flat reading in February.
Core retail sales have been expected to climb by 0.5
percent.
Meanwhile, the retail sales rose 0.6 percent in March after
climbing 0.5 percent in the previous month.
Economists had expected sales to rise by 0.3 percent.
Investors became cautious amid uncertainty about the second
round of trade talks between the U.S. and China.
Various news outlets said China had offered to reduce its trade
surplus with the U.S. by $200 billion, although Chinese Foreign
Ministry spokesperson Lu Kang denied the reports.
"This rumor is not true. This, I can confirm," Lu told
reporters. "I do not know about the offers made by either
party."
He added, "As we know the consultations are still underway. I am
not getting ahead of that. The consultations themselves are
constructive."
Meanwhile, crude oil prices were flat, holding strong recent
gains amid speculation OPEC supplies are dwindling.
OPEC officials told Reuters that this month's spike in oil
prices is due to temporary geopolitical tensions and not a
fundamental re-balance in oil markets. Therefore, the cartel is
expected to continue its supply quota plan with Russia.
The loonie traded mixed against its major counterparts in the
Asian session. While it held steady against the yen and the
greenback, it fell against the euro and the aussie.
The loonie declined to 0.9665 against the aussie, its weakest
since May 8. On the downside, 0.98 is likely seen as the next
support for the loonie.
The loonie reversed from an early high of 1.5067 against the
euro, sliding to a 2-day low of 1.5166. If the loonie continues its
fall, 1.53 is possibly seen as its next support level.
Data from Destatis showed that Germany's consumer price
inflation accelerated unexpectedly in April, though marginally.
Producer price inflation rose to 2.0 percent in April from 1.9
percent in March. Meanwhile, the rate was forecast to slow to 1.8
percent.
Having advanced to 1.2791 against the greenback at 8:15 am ET,
the loonie reversed direction and slipped to a 3-day low of 1.2885.
The next possible support for the loonie is seen around the 1.30
level.
The loonie fell to a 2-day low of 86.07 against the Japanese
yen, from a high of 86.73 hit at 8:15 am ET. The loonie is likely
to find support around the 85.00 level.
Data from the Ministry of Internal Affairs and Communications
showed that Japan consumer prices rose 0.6 percent on year in
April.
That was shy of expectations for a gain of 0.7 percent and was
down sharply from 1.1 percent in March.
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