The retail sales figures coming from Canada do not reassure investors. In April 2015, they showed a sharp decrease. These poor performance only added fuel to the fire of all those difficulties the Canadian economy faced in Q2 2015. This seems to be the key reason why consumer spending is still at its lows.
Masterforex-V Academy reports that the April retail sales figures showed a 0.2% decline. According to Statistics Canada - Canada's national statistical agency - the retail sales decline adjusted for seasonality was 0.1%, which shrank the retail sales down to 42.28 billion CAD or 34.74 billion USD in absolute figures.
On top of that the actual figures contradict the analyst expectations of +0.7%, Market Leader reports.
So, it seems that the CPI is under the influence of energy prices. Indeed, the current CPI slowdown has a lot to do with low oil prices. The CPI excluding energy prices gained 2.2% in May 2015 y/y.
The energy index dropped by 11.8% y/t in May 2015 after going down by 13,5% y/y in April 2015. The gasoline index dropped by 17.4% and 21% respectively over the same reporting periods. The electricity index showed the only positive dynamics among energy sub-indexes. Natural gas showed a decline by 14.4% and 18.6% respectively over the same reporting periods.
Meanwhile, the Canadian Dollar is still declining against its U.S. counterpart amid the poor data mentioned above. USDCAD is currently trading around 1.2392 as a part of a mid-term trend. The closest major levels of support are the 1,2561 / 1,2834 highs while the key support level is located at the local low of 1,2126. This is confirmed by the chart below, courtesy of Masterforex-V Academy.
