USD/CAD drops as Canada retail sales beat expectations at 0.2%

USD/CAD declined 0.4% to 1.4350 following Canada's better-than-expected October retail sales data, which rose 0.2% versus 0.0% forecast. Despite unemployment creeping higher and housing market struggles, Canadian consumers continue spending, with advance November readings showing very strong momentum. Core retail sales faced headwinds from food and beverage retailers, particularly beer, wine, and liquor stores which plummeted 10.6%, partially attributed to a British Columbia strike. The resilient consumer spending data reduces pressure on the Bank of Canada for aggressive rate cuts, supporting the loonie. Technical indicators show USD/CAD testing support at 1.4340, with resistance at 1.4400. The stronger retail sales figures suggest Canadian economic resilience despite housing sector challenges, potentially limiting further CAD weakness and keeping the BoC cautious about monetary easing pace.