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Canadian retail sales rise in January, economy likely to grow around 1.4 pct in Q1 2018

Canadian retail sales grew in January. Sales rose 0.3 percent in the month after falling sharply in December. Price rises were behind much of the gain. In real terms, sales rose 0.1 percent. Sales rose in two-thirds of the industries, with electronics and appliance stores, furniture and home furnishing stores and general merchandise stores leading the way. On the contrary, sales at motor vehicle and parts dealers fell in the month because of a drop in new and used vehicle sales.

Region wise, the performance was mixed, with sales rising in six provinces. Manitoba, PEI and Ontario saw the largest gains, whereas B.C. recorded a decline for the third consecutive month.

Retail sales rose in January, but the growth in volumes does little to counter the sharp decline seen at the end of 2017 and strengthens the view that the Canadian economy got off to a weak start this year. In all, the real GDP growth for the first quarter is likely to come in at about 1.4 percent, noted TD Economics.

“Going forward, household spending should be supported by solid income and job gains, but rising interest rates and a cooling in the housing market will provide some offset. As such, consumer spending is expected to decelerate from last year's hearty pace this year”, stated TD Economics.

At 16:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 23.9186, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -101.335. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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