Canadian Dollar Steadies as Oil Prices Rebound and Retail Sales Disappoint: What This Means for Investors

The Canadian dollar has steadied against its US counterpart, trading in a range of 1.3756 to 1.3801, as the price of oil clawed back some recent declines and domestic data pointed to sluggish household spending. This comes after retail sales declined by 0.2% in October, following a 0.9% decline in September, due to lower sales at food and beverage retailers.

Understanding the Impact on the Economy

Despite the decline in retail sales, a preliminary estimate for November shows sales rebounding by 1.2%. According to macro strategists, household spending has remained relatively stagnant in the fourth quarter, despite some monthly volatility. This suggests that the Bank of Canada is likely to keep a close eye on the weak trend in consumption, but these numbers aren’t soft enough to prompt central bankers to take action.

What This Means for Investors

The loonie was trading nearly unchanged at 1.3775 per US dollar, or 72.60 US cents, after moving in a range of 1.3756 to 1.3801. For the week, the currency was also little changed after domestic data showed inflation running at a cooler than expected pace. This follows three straight weekly gains, and investors are now waiting to see how the market will react to the latest developments.

Key Takeaways

• Retail sales declined by 0.2% in October, following a 0.9% decline in September
• A preliminary estimate for November shows sales rebounding by 1.2%
• The loonie was trading nearly unchanged at 1.3775 per US dollar, or 72.60 US cents
• Canadian bond yields rose across a steeper curve, tracking moves in other sovereign debt markets

The price of oil, one of Canada's major exports, was up 1.2% at $56.80 a barrel, as the market waited for news about a possible Russia-Ukraine peace deal. Investors are advised to keep a close eye on the market and do their own research before making any investment decisions.