• American focus : the Canadian dollar strengthened

Market news

21 March 2014

American focus : the Canadian dollar strengthened

The Canadian dollar has risen considerably after strong economic data on retail sales and inflation. The data presented by Statistics Canada showed that in January retail sales rose by 1.3 % - to $ 40.7 billion , almost offsetting the decline in December by 1.9% ( revised from -1.8 %). Experts predicted that sales will rise by 0.8%. Meanwhile, it became known that an increase was reported in 7 of 11 subsectors , representing 83% of total retail sales. Sales in dollar terms increased by 1.4% , indicating that higher volumes of goods sold.

Statistics Canada reported last month that the consumer price index increased by 1.1 % per annum, after increasing by 1.5%. According to estimates , the index should rise by 0.9%. Lower gasoline prices have led to slower growth in the consumer price index . Compared with February last year, gasoline prices have fallen by 1.3% , after rising in January by 4.6%. On a monthly basis , gasoline prices rose 2.3 % in February , compared with an increase of 8.4% in the same month last year. Of the eight major components , six recorded growth in annual terms . Higher housing costs and food prices have led to an increase in the CPI. At the same time , the indices for transportation and for clothes and shoes made ​​the greatest contribution to the slowdown in the CPI.

The euro exchange rate against the dollar rose moderately against the background data , which showed that the positive balance of payments euro zone increased significantly in the month of January , which was caused by an increase in the trade surplus in goods and services . According to the report , the seasonally adjusted current account surplus rose in January to a level of 25.3 billion euros, compared with a surplus of 20 billion euros a month earlier , which was revised down from 21.0 billion euros. Meanwhile , we add that the surplus in trade in goods amounted to 15.9 billion in January, compared with EUR 14.5 billion in the previous month . In addition, the services account surplus rose to 11.8 billion euros from 9.6 billion euros in December. The European Central Bank reported that the growth of the surplus in merchandise trade deficit was partially offset by a current account transfers - at 9.3 billion, however , the deficit fell from 11.2 billion euros in December. Revenue fell to 6.8 billion euros from 7.1 billion euros.

The pound fell slightly against the dollar , reaching a minimum at the same time yesterday . Possible driver of this decline was the dynamics of GBP / JPY, due to the increasing demand for the yen. Repatriation flows bound for Japan in anticipation of the end of the financial year are probably now the only catalyst for the exchange . Little influenced by data that showed that the UK 's budget deficit in February widened more than expected . Note that net borrowing in the public sector , excluding the intervention has increased to 9.3 billion pounds in February , while in the same period last year borrowing was 6.5 billion pounds. In January 2014 net borrowing in the public sector showed a negative balance of 4.99 billion pounds. It was expected that the budget deficit will rise to 8.6 billion pounds. Over the 2013/14 financial year net borrowing in the public sector excluding temporary effects of financial interventions was 87.2 billion pounds. It turned out to be 17.9 billion pounds higher than for the same period of 2012 /13 , while borrowing was 69.3 billion pounds. In addition, according to official figures , net debt in the public sector excluding temporary effects was 1.2468 trillion pounds by the end of February , which is equivalent to 74.7 % of GDP.

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