Canadian Ivey PMI is based on a survey of purchasing managers in a variety of economic sectors. Respondents are surveyed for their view of economic and business conditions in the Canada. A reading which is higher than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Thursday at 14:00 GMT.
Indicator Background
Market analysts are always interested in the views of purchase managers on the economy, as the latter are considered to be attuned to the latest economic and financial developments, and their expectations could be an indication of future economic trends. Ivey PMI is one of the most important Canadian releases, and can affect the direction of USD/CAD.
Ivey PMI fell sharply in the May reading, dropping from 61.6 points to 52.2 points. This was way below the estimate of 58.3 points. The markets are anticipating an improvement in June, with an estimate of 55.3 points. Will the PMI bounce back this month with a strong reading?
Sentiments and levels
The US dollar has shown recently shown broad strength against the major currencies, including the loonie. Canadian economic numbers have not impressed of late, and the weak GDP release underscores trouble in the Canadian economy. The US has been churning out disappointing numbers, and market uncertainty about the US recovery could continue to weigh on the Canadian dollar. Thus, the overall sentiment is bullish on USD/CAD towards this release.
Technical levels, from top to bottom: 1.0652, 1.0523, 1.0446, 1.0340, 1.0285 and 1.0180.
5 Scenarios
- Within expectations: 52.0 to 58.0: In such a case, USD/CAD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 58.1 to 61.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 61.0: The likelihood of a sharp expansion is low. Such an outcome would push the pair upwards, and a second resistance line might be broken as a result.
- Below expectations: 49.0 to 51.9: A sharper decrease than forecast could push USD/CAD downwards and break one level of support.
- Well below expectations: Below 49.0: This scenario would indicate substantial contraction in the Canadian economy. This would likely push the pair down, possibly breaking a second support level.
For more about the loonie, see the USD/CAD.
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