USD/CAD trades around 1.4095 on Friday at the time of writing, up a modest 0.06% as the US Dollar (USD) retains a slight advantage following the release of solid US economic data, while the Canadian Dollar (CAD) remains pressured by weak domestic indicators and softer Oil prices.
The United States (US) S&P Global Composite Purchasing Managers Index (PMI) rose to 53.6 in July from 51.9 in June, signaling an acceleration in private sector activity
The Services PMI improved to 53.6, while the Manufacturing PMI eased slightly to 53.8 from 53.9. According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, the survey is consistent with annualized Gross Domestic Product (GDP) growth of around 2% in the third quarter, although supply chain disruptions and price pressures continue to intensify. The stronger-than-expected data highlights the resilience of the US economy and helps support the US Dollar, although the immediate market reaction remains limited.
Investors are now focused on next week’s Federal Reserve (Fed) policy meeting for further guidance on the monetary policy outlook. In Canada, Friday’s data pointed to renewed weakness in producer prices. The Industrial Product Price Index fell 1.4% MoM in June after a revised 1.4% increase in May, while the Raw Material Price Index dropped 6.9%, well below market expectations.