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  • Markit Manufacturing PMI in Canada recovered in May, stayed below 50.
  • USD/CAD continues to edge lower toward 1.3700 after the data.

The economic activity in the Canadian manufacturing sector continued to contract in May at a softer pace than it did in April, the IHS Markit’s monthly report showed on Monday. The Manufacturing Purchasing Managers Index (PMI) rose to 40.6 from 33. 

Commenting on the data, “May data highlights that the Canadian manufacturing sector remains on a steep downward trajectory, despite the speed of decline moderating from April’s survey record,” said Tim Moore, Economics
Director at the IHS Markit. “A severe drop in demand from both domestic and export markets amid the COVID-19 pandemic resulted in sharp cutbacks to production volumes.”

Market reaction

The USD/CAD pair edged lower after this data and was last seen losing 0.42% on the day at 1.3710.