Home Daily Commentaries USDCAD falls amid US PMI data

USDCAD falls amid US PMI data

Tuesday 23 August, 2022

Daily Currency Update

USDCAD was down on Tuesday after US private sector firms signaled a sharp fall in business activity in August, according to flash PMI data from S&P Global. There’s little on the Canadian economic calendar on deck, so direction for the CAD this week could continue to be influenced by the USD.

The US Dollar Index advanced almost 1% on Monday, buoyed by a repositioning in market expectations leading into this week’s annual Jackson Hole Symposium on Monetary Policy. 

The assumption US Federal Chair Jerome Powell will maintain an aggressive approach to near term rate hikes has helped fuel an uplift in US treasury yields and global rates, strengthening USD and putting pressure on EUR and GBP.

USDCAD was trading around 1.29646 at the time of writing.

Key Movers

The euro rebounded against the US dollar on Tuesday, touching parity again following the release of US PMI data that showed the US private sector continued to contract in August. EURUSD was trading at 1.00059 at the time of writing.

GBPUSD also staged a recovery on the back of a slightly softer dollar and despite data that showed a contraction in the UK manufacturing sector, which dropped to 46.0 from 5.21 the previous month. UK services PMI printed a figure of 52.5, better than the forecast of 51.5. GBPUSD was trading around 1.1867 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.2919 - 1.3005 ▼
  • GBP/CAD: 1.5299 - 1.5384 ▲
  • AUD/CAD: 0.8949 - 0.8998 ▲
  • USD/CAD: 1.2952 - 1.3062 ▼