Canada’s retail sales grow in September, Bank of Canada likely to remain on hold in December
Source: FxWire Pro - Commentary / 23 Nov 2017 12:37:23 Eastern Standard Time
Canada’s retail trade rose in September after declining for two months. Retail sales grew 0.1 percent, but in real terms the sales continued to decline. Sales volumes dropped 0.6 percent in the month. Increased sales of 2.6 percent at gasoline stations mainly drove the overall increase in September. This is due to rising prices caused by Hurricane Harvey.
Volumes of gas stations sales actually dropped 2.5 percent. Sales related to housing activity and building material and garden equipment stores rose, while most other industries saw a decline during the month.
Region wise, the story was a mixed bag, with sales up in half the provinces. Ontario saw the largest gain in dollar terms, owing to higher gas station sales, while B.C., Alberta, New Brunswick and Newfoundland and Labrador also rose in the month.
Following a solid first half of the year, consumers took a breather in the third quarter, with retail sales volumes declining 0.4 percent in the three month period, stated TD Economics in a research report. This implies a deceleration of GDP growth in the quarter from its earlier breakneck rate, with our tracking currently sitting below 2 percent. The soft handoff also lowers momentum heading into the fourth quarter.
Consumer spending has been a main driver of economic growth in 2017 and while a more sustainable pace of growth is likely, it should continue to be a crucial support going forward, noted TD Economics.
“We continue to expect the Bank to remain on hold in December, before taking rates higher in early-2018”, added TD Economics.
At 17:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -8.23814, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -119.637. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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