Canadian factory sales rose in June for the first time in three months, economists in a Bloomberg News survey forecast before Statistics Canada reports the data tomorrow. Manufacturing sales increased 0.3 percent, after a 0.4 percent drop in May, they projected.
The loonie has traded below its 50-, 100- and 200-day moving averages since July 26 as it strengthened beyond parity with its U.S. counterpart. The Canadian dollar has been as strong this year as 98 cents to the greenback on April 27 and as weak as C$1.0447 on June 4.
“We feel quite comfortable here close to parity,” Camilla Sutton, chief currency strategist at Bank of Nova Scotia’s Scotiabank unit in Toronto, said in a phone interview.
The U.S. currency gained earlier versus most major peers after Goldman Sachs Group Inc. said in a report yesterday the Fed will delay a third round of bond-buying, known as quantitative easing.
U.S. retail sales advanced 0.8 percent in July, data showed yesterday, the biggest jump since February and first gain in four months, the Commerce Department said yesterday. American employers added 163,000 jobs last month, the government said Aug. 3, compared to a 64,000 increase in June.
The loonie remained higher today even after a report showed the cost of living in the U.S. remained little changed in July and a factory gauge of the New York region unexpectedly fell.
The U.S. consumer price index reading capped a 1.4 percent gain over the past 12 months, the smallest year-to-year increase since November 2010, the Labor Department reported today in Washington. The Fed Bank of New York’s general economic index dropped to minus 5.9 this month, from 7.4 in July. The median estimate in a Bloomberg survey was 7.0. Negative readings signal contraction.
“As long as CPI is fairly soft, as long as the data does not continue to surprise on the upside as it has, then it leaves the door open to the potential for QE3,” Scotiabank’s Sutton said.
The U.S. central bank bought $2.3 trillion of assets in two rounds of quantitative easing between December 2008 and June 2011 to spur the economy.
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