CAD Little Changed After Canada's Ivey PMI Jumps Sharply in July
THE TAKEAWAY: [Canada’s Ivey PMI jumps more than expected in July] > [Business activity picks up; reverses previous month contraction] > [USDCAD little changed]
Business activity in Canada picked up in July, in a huge turnaround from the contraction seen in the previous month. Canada’s Ivey Purchasing Managers Index jumped to 62.8 in July on a seasonally adjusted basis after dropping to 49.0 in June, the lowest level since last July. Economists had forecast a reading of 52.0, based on the median of 13 responses to a Bloomberg News survey. A reading above 50 in the purchasing managers’ measure indicates improving business conditions.
According to a report released jointly by the Purchasing Management Association of Canada and the Richard Ivey School of Business, the Ivey Employment Index fell to 54.3 from 59.3, indicating a slowdown in labor market growth. On the other hand, the inventory index rose to 55.0 from 53.9, while the price index climbed to 64.8 from 42.9, due largely to expansions in Canada’s manufacturing and export industries as the U.S. economy picks up. Furthermore, price pressures continued to rise as a result of persistent strength of the Canadian dollar.
CADUSD 1-minute Chart: August 7, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
After an initial dip following the release of the PMI data, the Canadian dollar regained its footing against the U.S. dollar. At the time this report was written, the USDCAD pair was little changed from pre-data levels, trading at C$0.9969.
--- Written by Tzu-Wen Chen, DailyFX Research
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