CAD Supported as Canadian Tire Q4 Shows Consumer Resilience

USD/CAD faces potential downside pressure as Canadian consumer spending data signals underlying economic strength. Canadian Tire's Q4 results revealed normalized EPS surging 38% to $4.47, significantly outperforming expectations. More notably, CEO Greg Hicks highlighted that the retailer's internal data shows spending increases across all income cohorts, regardless of debt burden levels. This broad-based consumer resilience challenges the narrative of an imminent Canadian economic slowdown and could influence the Bank of Canada's rate path, potentially reducing the urgency for further monetary easing. Strong consumer spending typically supports the Canadian dollar by suggesting robust domestic demand and GDP growth. For USD/CAD traders, this data point adds to the case for CAD strength, particularly if upcoming Canadian retail sales and GDP figures confirm the trend. Near-term, traders should watch for whether this consumer resilience translates into firmer inflation readings, which could further bolster CAD by keeping the Bank of Canada cautious on additional rate cuts.