USD/CAD: Canadian Dollar Continues Bear Run as October Retail Sales Miss Forecasts

The US dollar surged against the loonie on Friday after a strong miss of Canadian retail sales increased bets the Bank of Canada may cut interest rates at their next meeting.

The retail sales report showed a strong fall in sales of 1.2% to $50.9 billion in October, missing market expectations of a 0.5% rise.

Excluding automobiles, the total value of sales at the retail level fell by 0.5% in October, while forecasts were set at a 0.2% rise. This shows that one of the main reasons for the decline were lower sales at motor vehicle and parts dealers, but building material and garden equipment also recorded a decrease in sales.

Energy prices have also weakened slightly and US-Canada spreads have somewhat narrowed in today’s trade, putting additional selling pressure on the loonie.

In the United States, the third estimate GDP report for the third quarter showed that economic activity increased at an annual rate of 2.1%, matching market forecasts and the Commerce Department’s second estimate. Imports, on the other hand, were higher than previously anticipated.

The report shows that the US economy has managed to maintain its moderate growth as the year ends, backed by a robust labour market and strong consumer spending. In the second quarter, real GDP growth came in at 2.0%.

From a technical standpoint, the USD/CAD pair continued to consolidate recent losses that started in early December and pushed the pair to a 7-week low of 1.3102 on Wednesday.

Today’s October retail sales from Canada triggered a strong sell-off in the loonie, moving the pair to an intraday high of 1.3181. The upper 1.31s could provide some resistance for USD/CAD which traded at 1.3168, as of 2:35 p.m. London time. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.