Forex: USD/CAD – Canadian dollar largely unmoved by rise in wholesale sales

on Jul 18, 2013
Listen Thursday July 18th: Canada’s dollar softened against its US peer yesterday as the Bank of Canada kept its benchmark rate at one percent for the 23rd consecutive time, deflecting concerns of an increase.

The pair traded lower in the Asian session today, near the 1.04 barrier, before climbing 40 pips at the beginning of European trade. Since then the quote has retraced somewhat, seemingly non-reactive to the positive Canadian wholesale sales data released earlier.
According to the Statistics Office, wholesale sales rose 2.3 percent to $50.3 billion in May, the highest rate of growth since the beginning of 2011. Sales increased in all subsectors, with miscellaneous and food, beverage and tobacco accounting for more than 70 percent of the growth.

At a press conference following announcement of yesterday’s interest rate decision, BoC governor Stephen Poloz said the country’s economy still has significant slack, that imbalances in the household sector continue to ‘evolve constructively’ and that inflation remains muted. Back in June Poloz signalled that the BoC will not contemplate any rise in interest rates until more durable signs of an economic recovery are discernible.
Said Poloz yesterday, “The considerable monetary policy stimulus currently in place will remain appropriate.”
Canada’s central bank also yesterday raised its economic growth forecast for this year to 1.8 percent, from the April prediction of 1.5 percent, while lowering its 2014 projection to 2.7 percent from 2.8 percent.