USD/CAD dips after strong Canada PMI

USD/CAD has posted moderate losses in Wednesday trade. In the North American session, the pair is trading at 1.3550, down 0.40% on the day. On the release front, there are no Canadian events and no major US indicators. On Thursday, Canada releases housing starts, while the US publishes weekly jobless claim figures.

Ivey PMI sparkles, but loonie yawns

PMI releases are considered reliable gauges of economic activity, and there was excellent news from the Ivey PMI in June. The index climbed to 58.2, up from 39.1 in May. In addition to the impressive jump, the reading was significant because it marked the first time that purchasing activity has expanded in four months. At the height of the coronavirus epidemic in April, the PMI fell to a record low of 22.8. Despite the sparkling PMI figure, the Canadian dollar hasn’t showed much movement.

US jobless claims expected to drop 

US unemployment claims are expected to fall for a 13th consecutive week on Thursday, but nobody is gloating over the employment situation. It’s true that jobless claims have been steadily falling, but a slow rate. Last week, the indicator dropped marginally from 1.48 million to 1.42 million, missing out on the estimate of 1.35 million. The sheer size of the weekly releases has made unemployment claims an important gauge of the health of the economy. Still, jobless claims have improved dramatically since the staggering reading of 6.64 million, back in early April. Analysts are projecting another slight drop in the upcoming release, with an estimate of 1.37 million.

USD/CAD Fundamentals

Wednesday (July 8)

  • 10:30 US Crude Oil Inventories. Estimate -3.2M.Actual 5.7M
  • 13:01 US 10-year Bond
  • 15:00 US Consumer Credit. Estimate -15.2B

Thursday (July 9)

  • 8:15 Canada Housing Starts. Estimate 185K
  • 8:30 US Unemployment Claims. Estimate 1375K

*All release times are EDT

*Key events are in bold

USD/CAD Technical

USD/CAD was steady in the Asian session. The pair posted small gains in the European session and the downward trend has continued in North American trade.

  • USD/CAD has broken below 1.355o in the North American session. The next support level is at 1.3420

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.