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Can’t get enough of the Loonie? Check out if Canada’s retail sales release tomorrow at 1:30 pm GMT can get you some pips!

Here are important points you need to know:

What happened last time?

  • Headline retail sales dropped by 1.2% – the sharpest since November 2018 – in October
  • Core retail sales dipped by 0.5% when analysts had expected a 0.3% gain
  • September’s core retail sales revised lower from 0.2% to -0.1%

Statistics Canada revealed that 8 out of 11 subsectors – which make up 81% of retail activity – reported lower sales in October. Motor vehicle and parts dealers were the biggest losers, though building material and garden equipment also decreased for the month.

CAD 15-Minute Forex Charts
CAD 15-Minute Forex Charts

CAD dropped across the board at the release of the weak report. Luckily for the bulls, the comdoll also recovered some of its losses before the day ended.

What are traders expecting this time?

  • Headline retail sales to rise by 0.6% after a 1.2% dip
  • Core retail sales could increase by 0.5% after a 0.5% fall in October

As you can see, market geeks are expecting some recovery after the previous month’s weaknesses.

Manufacturing sales contradicts this optimism as it actually contracted for a third straight month in November. The report also noted higher transportation sales, though, which could correct the weakness from October’s retail numbers.

November’s labour market numbers don’t look much better. Both full and part-time workers had lost jobs that added to a net job decrease of 71,000. Yikes!

How might the Loonie react?

If this week’s numbers surprise to the downside again, then the Bank of Canada (BOC)’s growth concerns and pronouncement that consumer spending is “unexpectedly soft” would be validated and CAD could extend its downtrend against its major counterparts.

But if Canada’s retail numbers show resilience in November, then CAD could retrace some of its intraweek losses as traders price in the possibility of BOC sitting on their hands instead of contemplating a rate cut in the foreseeable future.

Not sure which pair you’d like to trade? MarketMilk’s daily volatility chart might help you pick a pair and estimate your stop loss levels: