Canada’s retails likely to have increased in August on motor vehicle spending

Canada’s retail sales are expected to have risen in August driven by motor vehicle spending. According to a TD Economics research report, the retail sales are likely to have increased 0.5 percent sequentially. Excluding auto sales, retail sales are expected to have risen 0.4 percent on the month, with gasoline station receipts likely to have made a positive contribution because of Hurricane Harvey’s impact on prices.

The jobless rate had reached a post-crisis low in August while consumer confidence rose to record highs, both of which are expected have underpinned the rise in consumer spending. Core retail sales are also expected to have benefitted from a recent rise in wage growth, which has accelerated from its early 2017 lows, though unseasonably cool weather might have impacted adversely.

“Due to rising consumer prices, we look for real retail sales to underperform the nominal print with a more modest increase, consistent with a moderation in household spending growth from Q2”, added TD Economics.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was slightly bearish at -70.9963, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -54.9656. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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