Forex

Canadian dollar spike higher after the release of solid retail sales report which saw ex-auto sales jumped by 1.1% in Apr, much better than consensus of 0.7%. Headline sales rose 0.6% mom, inline with expectations. However, the knee-jerk reactions is short lived as USD/CAD quickly recovers back into established range. Dollar remains broadly pressured against as traders pare bets on the a rate hike from Fed in the near term. Interest rate futures showed a 12 percent chance that Fed will hike by 25bps next week, down from over 20% ago. Markets seems to be settling for a hike in Sep but expectation could change as coming growth data are released.

The Euro and Swiss franc are both lifted earlier today after stronger than expected PPI data. Germany PPI climbed 1.0% mom, 6.0% yoy, above expectation of 0.9% mom, 5.8% yoy. Swiss combined PPI climbed 1.2% mom, 3.9% yoy in May, above expectation of 0.9% mom, 3.6% yoy