The US dollar is trading relatively flat against its Canadian rival in the middle of the trading week, with investors combing through the latest economic data that are flashing recession signals. The greenback has been in freefall since November and it is attempting to stave off further declines. Can the greenback rebound?

According to the US Census Bureau, retail sales fell 1.1% in December, worse than the market estimate of 0.8%. The November figure was also revised lower to -1%. This represented the second consecutive month of declining retail sales. On an annualized basis, retail sales were unchanged at 6%.

The latest CB figures show that retail trade fell at gasoline stations (-4.6%), furniture stores (-2.5%), motor vehicle dealers (-1.2%), and electronics and appliance stores (-1.1%). But there was an increase in building materials and garden equipment stores (+0.3%).

In addition, when gasoline station sales were excluded from the headline print, sales were down 0.8%, signaling a weaker-than-expected holiday shopping season and a drop in consumer spending.

Meanwhile, on the inflation front, producer prices posted a deflation trend in December, with the producer price index (PPI) sliding 0.5%, topping the market forecast of 0.1%. The core PPI, eliminating the volatile food and energy sectors, edged up just 0.1%.

Year-over-year, the PPI and core PPI eased to 6.2% and 5.5%, respectively.

Industrial production and manufacturing output fell 0.7% and 1.3%, respectively.

The US housing market reported a significant rebound in the last week. According to the Mortgage Bankers Association (MBA), mortgage applications soared 27.9% for the week ending January 13. The 30-year mortgage rate eased to 6.23%.

The US financial markets were mixed midweek, with the leading benchmark indexes seesawing between positive and negative territory. But the US Dollar Index (DXY), which measures the greenback against a basket of currencies, plunged below 102.00, falling 0.53%.

The US Treasury market was red across the board, with the benchmark ten-year yield down 14.2 basis points to 3.393%. The one-month bill shed 1.6 basis points to 4.46%, while the 30-year bond dropped one basis point to 3.549%.

The USD/CAD currency pair was unchanged at 1.3388 at 14:33 GMT on Wednesday. The EUR/USD advanced 0.52% to 1.0845, from an opening of 1.0789.