The Canadian Dollar slumped to a session low against the Euro after a report showed that wholesale sales in the country declined by 3 ½ times the amount expected in December.
According to Statistics Canada, wholesale sales tumbled by 1.4% adding to the 0.2% decline recorded in November. The figure of C$49.59 billion was the worst figure recorded in six-months. Five out of the seven sectors, representing 79% of total sales, saw declines.
Sales volume, which feeds into the calculations for output growth, shrank by an even steeper figure of 1.6%, suggesting that wholesale trade dragged on gross domestic product for the month.
Economists had been expecting wholesale sales to decline by 0.4%. The fall was being largely blamed on the extreme winter weather that has affected most of North America. Toronto experienced the coldest December-January period in 20 years as temperatures in Canada’s largest city averaged minus five degrees Celsius (23 Fahrenheit).
Also weighing upon the Canadian currency was the release of data out of the US which showed that housing construction fell in January. The report was the latest in a string of disappointing data releases out of the world largest economy and Canada’s biggest trading partner.
Concerns that the US economy is slowing are growing and speculation is mounting over whether the Federal Reserve will continue to taper its monetary easing programme at its current pace. The Fed is due to release the minutes of its latest policy meeting later tonight.
Euro (EUR) Exchange Rates