The euro remained range-bound against the loonie on Friday after the release of weak economic data from both Germany and Canada. While Germany’s retail sales declined more than anticipated in November, Canada’s employment data missed forecasts. Overall, the EUR/CAD pair remained range-bound between 1.4560 and 1.4630 in the past 24 hours.
According to Destatis, Germany’s retail sales fell by 2.50% m-o-m in November, following a 1.30% rise in the previous month and worse than forecasts of a 0.50% decline.
On a y-o-y basis, German retail sales decreased by 2.40% in November 2023.
Overall, as per the preliminary data, German retail sales fell by 3.10% y-o-y in 2023.
Food retail sales grew by 0.50%m-o-m in November. On a y-o-y basis, food retail sales dipped 0.70% in November 2023. Non-food retail sales declined by 3.60% m-o-m in November. On a y-o-y basis, non-food retail sales decreased 3.10% in November 2023.
With regards to e-commerce and mail order transactions, retail sales declined by 2.80% m-o-m in November. On a y-o-y basis, e-commerce and mail-order trade fell by 3.50% in November 2023.
According to Eurostat, the Eurozone consumer price index rose by 2.90% y-o-y in December following a 2.40% increase in November but missed forecasts of a 3% growth.
The flash estimate indicates that the increase in Eurozone inflation was fueled by a 6.10% y-o-y rise in food, alcohol, and tobacco prices. The services sector posted a rise of 4% y-o-y in December. Likewise, non-energy industrial goods reported a growth of 2.50%. However, energy posted a decline of 6.70% on a y-o-y basis.
Excluding energy, food, alcohol, and tobacco, the Eurozone core inflation inched up 3.40% y-o-y in December, down from 3.60% in November and in line with economists’ estimates.
According to Statistics Canada, the country’s economy added a mere 100 jobs in December, following an addition of 24,900 jobs in the previous month and missed forecasts of 12,200 job additions.
The employment rate inched down 0.20% to 61.60% in December. Professional, scientific, and technical services recorded an addition of 46,000 jobs. Likewise, healthcare and social assistance posted an addition of 16,000 jobs. However, the wholesale sector lost 21,000 jobs. Similarly, the manufacturing sector lost 18,000 jobs.
Total hours worked inched up 0.40% in December. On a y-o-y basis, total hours worked 1.70% in December.
Furthermore, Statistics Canada stated that the unemployment rate was 5.80% in December, unchanged from November and a notch lower than the 5.90% jobless rate forecast by economists.
The weak economic data from both countries is expected to keep the EUR/CAD pair range-bound in the near term.
The historical price chart indicates that the EUR/CAD pair is consolidating above the support at 1.4560. The next resistance is anticipated to be only near 1.4760. Additionally, the currency pair is trading above its 50-day moving average, while the MACD indicator is showing a positive reading. Therefore, we anticipate the EUR/CAD pair to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
