The Canadian Dollar (CAD) started recovering against the Japanese Yen (JPY) since the last week. The pair is being traded around 82.48 and is expected to continue rising amid international merchandise economic release.

The “Statistics Canada” releases International Merchandise Trade which represents the difference in the imports and exports levels of Canadian goods. However, it doesn’t include intangibles like services. Export levels give a true image of Canadian growth because tangible goods like gold, oil, and manufacturing items constitute a large part of the country’s GDP. If a consistent demand in exchange for Canadian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the CAD.

On the other hand, the Bank of Canada releases stats with respect to the consumer price index excluding fruits, gasoline, vegetables, natural gas, tobacco, mortgage interest, fuel oil, and intercity transportation. These are the core volatile items which are supposed to be the key factor for triggering inflation rate in the country. If a high reading is printed, it means the BOC “Bank of Canada” has a hawkish view and signals a bullish market for the Canadian Dollar and vice versa.

Similarly, the retail sales data is considered as a significant indicator of the country’s business condition, hence suggests possible inflation of deflation quite remarkably. However, the data does not include automobiles.

With a reporting figure of 2.0% in May, it remained a little lower than 2.1%, the month before, down beating the economists’ expectation which was 2.6%.

Conclusion

Trading CADJPY can be a good idea over a short period of time. However, the chances are good for traders planning to trade the pair for a long term position.