Loonie to be impacted by Canada's retail sales report due out Tuesday

Posted On: April 23, 2012
Tuesday’s February retail sales report is likely to exhibit weakness, according to a Bloomberg poll of economists.

Nonetheless, the Canadian dollar continues to rise against the monetary units of Brazil and Japan  Mark Carney, governor of the Bank of Canada, indicated last week that his institution is moving toward a reduction in stimulus measures, as it responds to accelerating growth and rising inflationary pressures.

"The Bank of Canada announcement was the main driver of the Canadian dollar's strong performance," director of foreign exchange Blake Jespersen with Bank of Montreal told Bloomberg. "That's caused a shift in investors' view towards higher rates sooner in Canada and as a result, a higher floor for the Canadian dollar."

The nation hosting the globe's 10th-largest economy will see growth of 2.5 percent annualized during the second quarter, the Bank of Canada said last week. That forecast is up from the 1.8 percent projection issued in January.

The likelihood of the central bank increasing the interest rate by 25 basis points by December is 90 percent, according to market estimates published by the Montreal Gazette.

Category: Industry News

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