Canadian retail sales look good – USD/CAD slides

23 June 2016, 13:09
Sherif Hasan

The volume of retail sales advanced 0.9% in May, as expected, but on top of an upwards revision worth 0.2% for April. Core sales beat by jumping 1.3%, and also here, it comes on top of an upwards revision of 0.2%.

USD/CAD slips under 1.2750. The low so far is 1.2742 but struggles to remain under this level. The markets are somewhat holding their collective breaths towards tomorrow’s vote.

Canada was expected to report a rise of 0.9% in retail sales in the month of May after a drop of 1% beforehand. Core sales were predicted to advance by 0.6% after sliding 0.3%.

Markets have been obsessed with Brexit in the past few weeks: polls leaning for Leave weighed on the mood, pushing risk currencies such as the Canadian dollar down. When the Remain camp regained some ground, we had more “risk on” and this helped the loonie. Oil prices moved in tandem.

It’s quite refreshing to see a reaction to economic indicators, as we are seeing now.

USD/CAD traded around 1.2770, well within the 1.2750 to 1.2830 range. Oil prices have been recovering.

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