Canadian Dollar Hits New 30 Year High on Strong Retail Sales

The Canadian dollar hit a new 30 year high today after the release of May retail sales, which jumped by 2.8 percent, or five times more than market consensus. Such a result came on a jump in Building Supplies and Clothing, which rose 6.0 and 4.6 percent, respectively.

The only negative component of the breakdown came from a mild drop in Furniture and Electronics sales, but this was hardly a cause for concern after last month’s 1.4 percent growth. This drove both Canadian bond yields and the Canadian dollar higher. The market is now pricing in a 100 percent chance of a rate hike by the end of the year. There is no Canadian data due for release tomorrow, but Australia will be reporting consumer prices. They are expected to be firm like producer prices.