Canadian Dollar Drops Further - Canadian Retail Sales Could Provide a Fundamental Boost
The Canadian dollar led the declines for the commodity block, as the currency fell roughly 1 percent against the greenback as oil plunged nearly 4 percent and carry trades took a hit. However, data on Tuesday may show that Canadian retail sales rose for the third straight month in July at a rate of 0.7 percent. However, any increase may be due almost entirely to auto sales, and excluding this component spending is projected to rise only 0.1 percent. Such results would be in line with the Canadian wholesale sales report for the same period, as the overall index jumped 2.8 percent, but excluding autos the index rose 0.9 percent. All told, a rise in retail sales of 0.7 percent or more is likely to contribute to Canadian dollar strength, at least on a short-term basis. On the other hand, lackluster readings could drive the commodity dollar lower.
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