"The Bank of Canada has been repeating concerns regarding the lack of momentum in both exports and business investment in the current expansion"
- Charles St-Arnaud, economist with Nomura Global Economics
The Canadian Dollar has started the trading week with gains as the currency strengthened versus its U.S. counterpart on Monday, recovering from the six-month low hit on Friday following stronger-than-expected U.S. jobs data, as Ivey PMI surprised on the upside. The gauge rose to 58.6 up from 50.9 recorded in August, and well above the market consensus for an increase to 53.4. The employment component rose to 53, while inventories index inched higher to 60. USD/CAD was trading at 1.1198 from around 1.1208 ahead of the data release. The Ivey PMI is designed to measure monthly changes in economic activity based on a panel of purchasing managers from across Canada. It includes the public and private sectors and consists of five elements: purchases, employment, inventories, supplier deliveries and prices. Readings of more than 50 indicate purchasing by governments and companies advanced.
The data came on heels of disappointing trade balance figures, which posted its first trade deficit since June. The gauge came in at –C$0.6 billion, well below the forecasts of C$1.5 billion. Coupled with strong U.S. jobs data, the Canadian Dollar was hit hard and fell over 100 points on Friday.
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