Canada August Retail Sales Rise 1.2%, Pressuring USD/CAD Below Key 1.40 Level

USD/CAD dropped to a one-month low, breaking below the 1.40 threshold after Canadian retail sales rebounded by 1.2% month-over-month to CAD 74.6 billion in August. The rebound reversed a 0.7% contraction in July, with gains recorded across all nine retail subsectors. Inflation-adjusted retail sales volumes also rose 1.2%, confirming real consumption growth. Furthermore, core retail sales excluding autos rose 1.2%, while Statistics Canada's advance estimate projected a further 0.7% increase in September. The strong figures lifted Bank of Canada rate hike pricing to nearly 80%, bolstering the Canadian dollar against the US dollar.