The Canadian dollar continues to show limited movement. Currently, the pair is trading at 1.3053, down 0.15% on the day. There are no US economic publications on the schedule.
Retail sales in Canada sparkle
Canada ended the week of trading on a high as September retail sales were much stronger than expected. Overall retail sales jumped 1.1% from 0.4% previously. Core retail sales also impressed, dropping from 0.5% to 1.0%. Analysts had projected much lower numbers, with forecasts of 0.2% for the overall figure and 0.0% for core retail sales. Despite the good numbers, the Canadian dollar only managed small gains on Friday.
Will consumers continue to keep the purse strings open? The Covid-19 pandemic has caused enormous economic damage, and there are serious concerns that a Covid resurgence could have a severe impact on the normally robust Christmas shopping season. With the Canadian economy taking precarious steps to recover, a disappointing Christmas could cause problems for the economy and the Canadian dollar.
ADP’s non-farm payroll in Canada shows contraction
The Development of Non-Farm Employment in Canada ADP report continues to show declines in job creation. The October reading came in at -79.5 thousand, marking a third consecutive decline. Still, it was considerably better than the September release of -240.8 thousand. ADP’s releases, which are derived from actual ADP payroll data, were much weaker than official employment releases. The job change for October showed a gain of 83.6 thousand, which was down from 378.2 thousand, but still above expectations. We will get a clearer picture of the strength of the labor market in the first week of December with the publication of Employment Change.
Technical USD / CAD
- Support is weak at 1.3040. Below there is a support line at 1.3011
- We find resistance at 1.3110, followed by resistance at 1.3151
- USD / CAD continues to push lower on the 10-day MA line. If this line breaks, it would be an indication of a slowdown for the pair
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