The Canadian dollar climbed against its major opponents in the European session on Friday, after better-than-expected domestic consumer price inflation for June and retail sales for May.
Data from Statistics Canada showed that consumer price index was flat on a seasonally adjusted monthly basis, following a 0.2 percent slide in May. Economists were looking for a 0.1 percent drop.
Core CPI, excluding food and energy, rose 0.2 percent on a seasonally adjusted monthly basis, from a 0.1 percent gain last month.
Retail sales increased for the third consecutive month, rising 0.6 percent to $48.9 billion in May.
This exceeded forecasts for a 0.3 percent uptick and follows a downwardly revised 0.7 percent increase in April.
Core retail sales, excluding motor vehicle and parts dealers, dropped 0.1 percent month-on-month in May, compared to a downwardly revised 1.3 advance in the previous month. The index was forecast to be flat.
Meanwhile, oil prices fell ahead of the OPEC meeting next week, when OPEC and Russia will meet in Moscow to discuss their supply quota plan.
Crude oil for September delivery fell $0.72 to $46.20 a barrel.
The loonie showed mixed performance in the Asian session. While the loonie dropped against the greenback and the euro, it held steady against the yen. Against the aussie, it rose.
The loonie advanced to 1.2546 against the greenback, off its early low of 1.2609. The next possible resistance for the loonie is seen around the 1.24 area.
Having fallen to a 9-day low of 1.4683 against the euro at 2:45 am ET, the loonie climbed to 1.4601. Continuation of the loonie’s uptrend may see it challenging resistance around the 1.45 mark.
The Survey of Professional Forecasters published by the European Central Bank showed that the Eurozone economy is forecast to expand at faster than expected pace.
SPF respondents lifted 2017 growth outlook to 1.9 percent from 1.7 percent and that for next year to 1.8 percent from 1.6 percent. Expectations for 2019 was raised marginally to 1.6 percent from 1.5 percent.
The loonie was trading in a positive territory against the aussie with the pair trading at 0.9955. This may be compared to a 3-day peak of 0.9920 set at 11:45 pm ET. Further uptrend may take the loonie to a resistance around the 0.97 region.
The Reserve Bank of Australia’s Deputy Governor Guy Debelle said that Australia’s interest rate need not increase automatically with the tightening of other central banks.
“Just as the policy rate in Australia did not need to decline to the very low levels seen in other parts of the world, the fact that other central banks increase their policy rates does not automatically mean that the policy rate here needs to increase,” Debelle said in Adelaide.
The loonie bounced off to 88.90 against the Japanese yen, from a 3-day low of 88.45 hit at 8:15 am ET. The loonie is likely to target resistance around the 92.00 level.
The material has been provided by InstaForex Company – www.instaforex.com