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Canadian dollar is finding reprieve after a two-day losing streak against the USD, with USDCAD down over 0.8%.

Canadian retail sales jumped well past what investors anticipated in April, rising 0.8% compared to forecasts of just a 0.2% gain. Core retail sales ex-automobiles climbed a weighty 1.5% versus the 0.7% expected. This was somewhat tempered by negative revisions for both in the previous month, but all in all this supports a more optimistic outlook for the Canadian economy.

This makes tomorrow’s CPI inflation even more significant. A strong inflation print could push the Bank of Canada closer towards raising interest rates.

Unemployment claims weigh on USD

The dollar is trading lower after claims for unemployment came in higher than projected. Both initial and continuing jobless claims hit slightly higher than expected this morning. Despite the miss, these unemployment figures are still quite low and point to a steadily expanding labor market. Job openings remain elevated as employers search for skilled and experienced workers to fill their vacancies.

The biggest increases in initial claims of the newly unemployed for the second week in June were in California, Pennsylvania, and Florida. The largest decreases that week were seen in Tennessee, Arkansas, and Ohio.

Fed watch

We’ve had a busy week for Fedspeak, and today is no exception.

We will head from three more Fed officials: Governor Jerome Powell, who is typically a neutral FOMC member, James Bullard of the St. Louis Fed, and Cleveland Fed President Loretta Mester all have speaking events today. Bullard typically takes a more dovish view, and Loretta Mester falls on the opposite end of the spectrum.

Care to see where the FOMC members fall? See this infographic from Reuters.

 

EURUSD: Euro just a touch higher as the dollar remains on the back foot.

GBPUSD: Sterling slightly lower against the greenback with few catalysts to drive price action before tomorrow’s data dump.

AUDUSD: Aussie dollar lower on the day, but has picked up slightly on a miss from US jobless claims.

USDCAD: Canadian dollar up 0.6% against the greenback after retail sales beat expectations, pointing to a stronger outlook for tomorrow’s inflation figures.

USDJPY: Yen gains as safe-haven assets are back in the spotlight this morning. Gold also rose for a second day pointing to lower risk-appetite.