USD, CAD flows: USD slightly firmer, CAD little changed after data
US retail sales on the strong side, halting the USD's slide. Canadian CPI in line on the core
Stronger than expected US retail sales have given the USD a modest boost, although the impact on US yields has been quite small with just a 1-2bp rise along the curve. However, it has stalled the USD decline seen through this morning, and may be enough to prevent EUR/USD breaking through the 1.1830 high of the year.
While the Canadian headline CPI number was slightly below expectations at -0.1%, the BoC’s core measures were all in line with consensus, so won’t have an impact on the BoC’s decision tomorrow, which by now is seen as a near certain 25bp rate cut. All in all, the data should mean that major FX markets broadly hold ranges ahead of tomorrow’s central banks decisions.