Canadian, Australian and New Zealand Dollars All Give Back Gains

The Canadian, Australian and New Zealand dollars all gave back their gains today on the combination of weaker economic data and softer demand for high yielding currencies. Even though Canadian consumer prices were right in line with expectations, Canadian retail sales saw the sharpest decline since September 2006.

This was primarily due to a sharp fall in auto sales and gasoline receipts. In comparison, sales excluding autos fell 0.3 percent, which was right in line with expectations. Most economists expect the Bank of Canada to leave interest rates unchanged next month but some are still expecting a rate hike in October. As for New Zealand, the annualized pace of growth in credit card spending also slowed last month. This suggests that retail sales could continue to remain soft.