The headline Canadian retail sales report rose in line with expectations by 0.6 percent on the back of gasoline station and clothing purchases. Meanwhile, excluding autos, retail sales rocketed 1.1 percent higher, marking the biggest gain in five months. It is worth noting that these indexes are not adjusted for inflation, so the surge in gasoline prices during the survey period was likely a major driver of the rise in gas station sales. Nevertheless, the broad rise in most of the components (only auto and building supply sales fell) bodes well for domestic demand, as consumption appears to be holding up well. Furthermore, with the Bank of Canada becoming increasingly concerned about rising price pressures, indications of a pick up in spending will be a sign of additional upside inflation risks. As a result, there is greater potential that the central bank will consider raising rates this year. – Terri Belkas, Currency Analyst for DailyFX.com