Canadian Retail Sales Could Show Modest Improvement in February
Statistics Canada is scheduled to report on retail sales Wednesday, giving investors clues about the pace of Canada’s recovery during the winter.
Canadian retail sales increased 1.3 percent in January, following a revised drop of 1.9 percent, Statistics Canada reported last month. Retail revenues in January rose in seven of 11 sub-sectors, led by a 2.2 percent advance in automotives and a 7 percent increase at building material and garden equipment dealers.
Retail sales are expected to have risen 0.4 percent in February. Excluding automobiles, retail revenues rose 0.5 percent, experts say.
The release could surprise to the downside given the harsh weather conditions that gripped North America in February. However, a stronger than forecast reading could boost support for the Canadian dollar, which lost ground Tuesday. Wednesday could be a more active day, as Markit Group sets to report on the US manufacturing industry. The Commerce Department will also report on new home sales for March. In the afternoon session, the USDCAD pair was trading at 1.1028, up 15 pips.
Tomorrow’s release comes amid fresh waves of optimism concerning the Canadian economy. A tighter labour market, stronger trade and rising business confidence have all helped boost sentiment toward the Canadian economy and its currency.
In reality, Canada will need some time to recover. According to Bank of Canada Governor Stephen Poloz, the economy won’t return to full capacity until the latter half of 2015. Until then, growth in the world’s eleventh largest economy will remain choppy.
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