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The Canadian dollar increased in value as Canadian retail sales numbers were released for the month of May. In April, these numbers were worse than expected with a -0.4% decrease in retail sales. That said, prior to the release of today's retail sales numbers, it was believed that the retail figures would increase slightly to 0.4% over April's numbers. However, much to everyone's surprise, Canada's retail sales increased by 1.9% in May - the most rapid rate of growth since over two years ago in March of 2010. It is also important to mention that higher sales occurred in nine out of eleven different sectors. Vehicle and vehicle parts sales and food and beverage store sales were two of the largest contributors to the canadian retail sales number increase.
Prior to today's release, the Canadian dollar was taking advantage of the weakening US dollar. For instance, when the numbers regarding the US existing home sales decreased to 5.08 million in June of this year, the US dollar dropped. Existing home sales were expected to rise from 5.14 million to 5.27 million in June; this mark was missed. Moreover, the US housing starts and building permit numbers released last week were also disappointing.
Will the Canadian loonie increase in value in the near future? This situation mainly depends on Canada's economic situation. While some people are hesitant to believe that the dollar will increase much more, still other people are cautiously optimistic. For instance, recent data shows that Canada's largest railway posted a good second quarter and an optimistic outlook with respect to Western Canada Crude Select Exports for the remainder of 2013 - mainly from a continued demand for this crude oil from the United States.