US Markit PMI Fell In February; USD/CAD Mixed
THE TAKEAWAY: [U.S. Markit PMI shows manufacturing expansion little changed in August] > [Global slowdown continues to restrain demand for U.S. goods] > [USDCAD mixed]
Manufacturing in the U.S. expanded at a lower-than-expected pace in February amid slow recovery in global economy. A report released today by the London-based Markit group showed that its key business activity index dropped to 55.2 in February from 55.8 the previous month. A reading above 50 in the purchasing managers’ measure indicates expansion. The median forecast of 17 economists surveyed by Bloomberg News called for a rise to 55.5 with estimates ranging from 54 to 57.
Weakness conditions, particularly in Euro-area, continue to restrain demand for American goods, as services and manufacturing contracted at a faster pace than market expected. Also, the outlook for U.K. economy growth and inflationary pressure remained bearish according to the Bank of England Minutes released yesterday. Despite most equity indices were close to post-crisis highs, it still takes considerable time for the improvements in financial market sentiment being translated into real economy.
USDCAD 1-minute Chart: February 21, 2013
Chart created using Market Scope – Prepared by Renee Mu
Trading of the U.S. dollar was mixed in the minutes following the release of the Markit PMI report. After initially strengthening against the loonie, the greenback quickly erased gains and bounce back above pre-data levels. At the time this report was written, the USDCAD pair was trading at C$1.0194.
--- Written by Renee Mu DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.