The Canadian dollar is almost unchanged in the Monday session, after strong gains on Friday. Currently, USD/CAD is trading at 1.3139, down 0.02% on the day. On the release front, it’s a quiet start to the week. Canadian Wholesale Sales jumped 1.2%, crushing the estimate of 0.6%. This marked the strongest gain since October. In the U.S, the sole indicator is Existing Home Sales, which is expected to rise to 5.46 million.
Canadian retail sales indicators for May sparkled on Friday, boosting the Canadian dollar 1.0 percent. Core Retail Sales jumped 1.4%, after failing to post a gain for three straight months. This easily beat the forecast of 0.6%. Retail Sales rebounded 2.0%, above the forecast of 1.0%. This follows a decline of 1.2% in April. Consumer inflation remained pegged at 0.1%, matching the forecast.
The U.S. dollar was broadly lower on Friday, after U.S President Trump made comments critical of Federal Reserve monetary policy. U.S presidents traditionally do not comment on moves by the Fed, but that did not prevent Trump from tweeting on Thursday that “tightening now hurts all that we have done”. On the weekend, Treasury Secretary Steven Mnuchin engaged in damage control, saying at the G-20 meeting that Trump was not interfering with the Fed policy of gradually raising rates. However, investors weren’t buying Mnuchin’s apologetics, and the U.S dollar continued to lose ground in Monday’s Asian session. There was more for investors to fret over, as Trump also attacked the EU and China for manipulating their currencies and keeping interest rates lower. This has raised concerns that the current global trade war could be followed by a currency war.
