Loonie Rises Boosted by Chinese and European Flash PMIs

The Canadian dollar was higher Thursday amid positive economic news from Europe and China and rising commodity prices.

The loonie was ahead 0.27 of a cent to 89.21 cents US.

Financial information company Markit said its composite purchasing managers’ index for the euro zone – a gauge of business activity across the manufacturing and services sectors – rose to 52.2 points in October from 52.0 in September. Anything above 50 indicates expansion.

Also, HSBC’s preliminary version of an index based on a survey of Chinese factory purchasing managers rose to 50.4 from 50.2 in September. HSBC’s chief China economist Hongbin Qu said manufacturing likely stabilized in October but the world’s No. 2 economy continues to show signs of “insufficient” demand.

Financial markets have been volatile over the last month amid worries that the euro zone could slip back into recession and that China’s economy was weakening.

The loonie had slipped 0.12 of a cent Wednesday as the Bank of Canada left its key rate unchanged at one per cent.

via The Globe and Mail

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza