Disappointing Retail Sales Push Canadian Dollar to 15-Day Low Against U.S. Dollar

The Canadian dollar continued to slide on Wednesday due to weak retail sales data. Statistics Canada said today both retail and core retail sales, which exclude sales of automobiles, declined in December of 2016 by 0.5% and 0.3%, respectively.

Key Highlights:

Auto parts dealer sales: -0.9%
Auto parts sales at retail outlets: +18.2%
Used car dealer sales: +1.6%
Food and beverage store sales: -0.4%
Wine and liquor store sales: -3.6%
Gas station sales: +6.6%
Hardware store sales: +0.7%
Electronics and appliance store sales: -2.3%
Jewellery store sales: -12.4%
Clothing store sales: -3.7%
Sportings goods, book and music store sales: -0.5%

Statistics Canada data for December also showed sales declining in eight Canadian provinces: Ontario, Quebec, British Columbia, Nova Scotia, Alberta and Saskatchewan.

Although overall retail sales declined in Canada, E-commerce sales reached an all-time high of 1.7 billion in December, accounting for a total of 3.4% of all retail sales.

Online sales were particularly strong during the holiday season, “Leading up to the holiday shopping season, on-line sales surged in November ($1.5 billion), which includes Black Friday and Cyber Monday,” says Statistics Canada.

The 0.5 percent decline in December retail sales - the first in four months - pushed the CAD to a 15-day low of 1.32099 against the USD on Wednesday. Since February 16, 2017, Canada’s currency has declined by approximately 1.54 percent against the dollar:

The USD/CAD currency pair is now trading near the highs from February 7th, and it remains to be seen if today’s poor retail sales figures push the pair higher by the end of the week.

Canadian $5 bill photo by Charlton Clemens

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