Daily Afternoon Report 13.05.2016
The U.S. dollar rose against its Canadian counterpart on Friday, boosted by the release of upbeat U.S. retail sales data and as declining oil prices weighed on the commodity-linked Canadian currency.
USD/CAD hit 1.2915 during early U.S. trade, the pair’s highest since Wednesday; the pair subsequently consolidated at 1.2897, gaining 0.43%.
The pair was likely to find support at 1.2771, Thursday’s low and resistance at 1.2978, the high of May 10.
The U.S. Commerce Department said retail sales increased by 1.3% last month, compared to expectations for a rise of 0.8%. Retail sales for March dropped 0.3%, whose figure was revised up from an initial 0.4% decline.
Core retail sales, which exclude automobile sales, increased by 0.8% in April, beating forecasts for an advance of 0.5%.
A separate report showed that U.S. producer price inflation rose by 0.2% in April, compared to expectations for a 0.3% gain, after a 0.1% slip the previous month. Year-on-year producer prices were flat.
Core PPI, which excludes food and energy, ticked up 0.1% last month, in line with expectations.
Meanwhile, the Canadian dollar remained under pressure as oil prices declined on Friday, after Russia warned that a global crude supply glut could last into next year.
The loonie was higher against the euro, with EUR/CAD was steady at 1.4606.
Official data earlier showed that euro zone gross domestic product rose to 0.5% in the first quarter, from 0.3% in the preceding quarter.
That was below the initial reading of 0.6% released on April 29 and consensus that was expecting no change.
Year-on-year, GDP in the single currency bloc rose 1.5%, also below the initial estimate, the fourth quarter reading and analyst forecasts for growth of 1.6%.