- Canadian manufacturing sector contracts for second straight month in May.
- Both the ISM and Markit Manufacturing PMI in US fall short of expectations.
- US Dollar Index edges lower to mid-97s.
The USD/CAD pair came under a renewed pressure in the early NA session following the Manufacturing PMI releases from both Canada and the United States. As of writing, the pair was down 0.3% on a daily basis at 1.3477.
Although the IHS Markit’s Manufacturing PMI in Canada came in at its lowest level since late 2015 at 49.1 to show contraction for the second straight month in the sector, the loonie didn’t have a difficult time outperforming greenback.
The IHS Markit’s Manufacturing PMI in the U.S. at 50.5 in May posted its worst reading since September 2009. Commenting on the data, “May saw US manufacturers endure the toughest month in nearly ten years, with the headline PMI down to its lowest since the height of the global financial crisis,” Chris Williamson, Chief Business Economist at the IHS Markit, noted. “While tariffs were widely reported as having dampened demand and pushed costs higher, both producers and their suppliers often reported the need to hold selling prices lower amid lacklustre demand.”
Similarly, the ISM Manufacturing PMI fell to 52.1 in May from 52.8 to confirm the slowdown in the pace of expansion in the sector’s business activity. The US Dollar Index extended its decline after the disappointing data and dropped to its lowest level since May 16 at 97.50. At the moment, the DXY is down 0.08% on the dya at 97.54.
Meanwhile, despite a pullback from daily highs, crude oil prices are clinging to gains with the barrel of West Texas Intermediate adding 0.5% and helping the commodity-related loonie preserve its strength.
Technical levels to watch for
Share
