It was a simple case of buy the rumor sell the news as the USDCAD currency pair jumped up following the announcement of slightly better than expected Canadian retail sales and the Bank of Canada announced its decision on interest rates.  Declining through the overnight, the USDCAD rate found support at 0.9990 before vaulting higher to trade at 1.0066 immediately following the release by Statistics Canada.

According to the survey, retail sales in the world’s tenth largest economy rose by 0.5% in August – compared to estimates of a 0.4% climb in the month.  July’s figures were also revised a bit higher, now declining by 0.5%, compared to an earlier booking of a 0.6% drop.  Core figures were also positive for the economy, rising by 0.4%, matching market estimates.  A majority of the monthly gains seemed to be attributed to auto related purchases – through dealerships and gasoline sales – rather than consumer goods.

All in all, today’s report shows that the Canadian economy remains resilient to the negative effects from the European debt crisis and a global slowdown.  But, it’s too late to change the minds of the Bank of Canada and its governor Mark Carney.  In an interest rate decision that went widely as planned this morning, policymakers kept interest rates at 1% for the 9th consecutive time.  Although Carney acknowledges that there is currently “considerable monetary policy stimulus” in the economy, the state of country continues to be “subject to downside risks”.  The sentiment prompted a cut in growth forecasts for this year and next year.  Canadian growth is anticipated to expand by 1.9% compared to an earlier assessment of 2.6%.