The Canadian dollar (CAD) gained ground against the Japanese yen (JPY) today because of the retail sales data released a few days ago, which showed an increase of 3.6 percent, exceeding economists’ expectations of 2.3 percent.
Statistics Canada published monthly retail sales numbers, which indicates all products sold by retailers based on a sample of retail stores of all styles and sizes. Retail sales are one of the tools while calculating the performance, leading to lower readings pointing to the weak economy and the devalued dollar.
There is one more piece of news about the upcoming decrease in the Japanese unemployment rate, which might bring the Canadian dollar ever closer to its ideal level.
On Friday, the Japan Statistics Bureau will release data on the unemployment rate (May 28, 2021). According to economists, the unemployment rate in April maybe 2.7 percent, up from 2.6 percent the month before.
The unemployment rate in Japan is an indicator of the number of unemployed people. A high percentage suggests labor market weakness, which affects the intensity and course of the Japanese economy. As a result, a low reading can be bullish for the JPY and vice-versa.
Conclusion
The short-term traders would benefit from the selling strategy, but long-term traders should keep it because the pair tends to lead the pair forward.