Canadian retail sales rose for the fifth consecutive month in July, led by furniture, building supply, and pharmacy sales. However, the gains were not quite as high as expected, as the headline retail sales index rose 0.1 percent while sales excluding autos picked up 0.4 percent. In fact, it was automotive sales that showed the sharpest decline of all the components, as high gasoline prices deter car buyers. Likewise, gas station purchases slowed to a crawl at 0.1 percent (vs. 4.0 percent in June). Overall, the data suggests that the Canadian economy has held up well in recent months – despite the US economic slowdown – as domestic demand supports growth.
The Canadian dollar has surged in the minutes following the release, leading USD/CAD to pull back to 1.0475 from 1.05.