CANADA FX DEBT-Canadian dollar slips as retail sales data shows domestic economy softening
By Fergal Smith
TORONTO, July 24 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as domestic data showed that retail sales declined in May, but the move was limited ahead of a Bank of Canada interest rate decision next week.
The loonie CAD= was trading 0.3% lower at 1.3635 per U.S. dollar, or 73.34 U.S. cents, after moving in a range of 1.3592 to 1.3646. On Wednesday, the currency touched its strongest intraday level since July 4 at 1.3573.
Canada's retail sales shrank by 1.1% in May from April as consumers curtailed car purchases and spent less at supermarkets, convenience stores and on alcohol. A preliminary estimate for June pointed to a rebound of 1.6%.
"This decline points to softening domestic demand, though markets remain relatively calm, with expectations that the Bank of Canada will maintain its 2.75% interest rate at next week's meeting amid persistent inflation pressures," said Tony Valente, senior FX dealer at AscendantFX.
The BoC has kept its benchmark rate on hold at 2.75% since March, after slashing it by two and a quarter percentage points in the previous nine months. Investors expect no change at a policy decision next Wednesday and are pricing in just 12 basis points of easing by the end of 2025, down from about 30 basis points before stronger-than-expected jobs data earlier this month. 0#CADIRPR
"Despite this pullback, the CAD remains resilient, supported by positive broader risk sentiment and signs of USD fatigue against other major currencies," Valente said.
The U.S. dollar .DXY clawed back some of this week's decline against a basket of major currencies, while the price of oil CLc1, one of Canada's major exports, was up 0.8% at $65.75 a barrel on optimism over U.S. trade negotiations and after a sharper-than-expected decline in U.S. crude inventories.
The Canadian 10-year yield CA10YT=RR was little changed at 3.546%, pulling back from an earlier one-week high at 3.614%.
Related Articles
Investing in Clean Energy
TradingKey - Not so long ago, clean energy was relegated to a niche, a corner for subsidies, early markets, and greens. Now it's at the center of global economic thought. Governments, business, and consumers are driving a structural transformation from fossil fuels to renewables. The roofs are toppe
Investing in Luxury & Experiential Consumption
Niche assets like data centers, logistics, healthcare, and cold storage thrive on structural drivers, not traditional property cycles Specialized real estate benefits from secular trends like digitalization, demographics, and supply chain innovation, making demand resilient and less cycle-sensitive
Oracle’s FY2026 Q1 Preview: Will OpenAI Contract Spark a Broadcom-Like Stock Surge?
TradingKey - As analysts raise targets and expectations, could Oracle’s stock replicate the post-earnings rally seen at Broadcom following its OpenAI-related contract announcement?
U.S. August CPI Preview: Persistent Rise in Inflation, What Impact on Rate Cuts? And on US Stocks?
TradingKey - On 11 September 2025, the U.S. will publish August CPI data. Consensus forecasts indicate a 0.3% month-over-month increase for both headline CPI and core CPI. As a result, headline CPI year-over-year may climb to 2.9%, up from 2.7%
Fed to Cut Rates: All Asset Prices Up!
TradingKey - The Federal Reserve is almost certain to restart its interest rate cut cycle on 17 September this year. After in-depth research, we have concluded that cryptocurrencies, the broader U.S. stock market, and short-term U.S. Treasury bonds will all go up.
