Philadelphia Fed Suggests Further U.S. Manufacturing Contraction
The Philadelphia Fed reported a worse than expected print in its business outlook survey of manufacturing conditions, suggesting the regional production is continuing to contract. Although the broadest index increased to -17.5 from August dismal -30.7, which is the lowest since March 2009, it still missed calls for a read of -15 by economists and continued to add to the negative sentiment that the sector’s recovery is losing steam.
Within the Philadelphia Fed survey, the current new orders index increased 15.5 points, remaining in negative territory and pointing to lower demands in upcoming months. The current shipment index fell 8.9 points and printed at -22.8.
Charts created using Strategy Trader– Prepared by James Hao
Following the news, the USD/CAD pair was oscillating around the 0.9850 level within 10-bip range change. With U.S. Consumer Price Index rose more than forecast in an earlier release today, the speculation that Fed would resume bond purchasing plan was damped, sending bullish signals on to the market against the pullback indicator in manufacturing sector. At the time this report was written, the USD/CAD extended gains as the market moved in favor of safe haven amid woes about European debt crisis.
Written by James Hao, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.