Canadian Ivey PMI (Purchasing Managers’ Index) is based on a survey of purchasing managers from a wide range of economic sectors. Respondents are surveyed for their view of the economy and business conditions in Canada. A reading which is higher than the market forecast is bullish for the Canadian dollar.
Here are all the details, and 5 possible outcomes for USD/CAD.
Published on Friday at 14:00 GMT.
Indicator Background
Analysts are always interested in the views of purchase managers about the economy, as they are considered to be attuned to the latest economic and financial developments, and their expectations could be an indication of future economic trends. Thus, PMI readings are quite important and an unexpected reading could affect the movement of USD/CAD.
The index continues to point to expansion, having dropped below the 50.0 point line only once in 2013. The August reading came in at 51.0 points, short of the estimate of 52.6. The markets are again anticipating a reading of 52.6 for the September release.
Sentiments and levels
The Canadian dollar remains under pressure and has not gained ground despite a health GDP gains and the US government shutdown. If the Ivey PMI is not sharp, we could see the loonie lose more ground to the greenback. So, the overall sentiment is bullish on USD/CAD towards this release.
Technical levels, from top to bottom: 1.0523, 1.0446, 1.0340, 1.0250, 1.0180 and 1.01.
5 Scenarios
- Within expectations: 50.0 to 55.0: In such a case, USD/CAD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 55.1 to 58.0: An unexpected higher reading can send the pair above one resistance line.
- Well above expectations: Above 58.0: A sharp jump by the index could push USD/CAD upwards, and a second resistance line might be broken as a result.
- Below expectations: 47.0 to 49.9: A reading below 50 would indicate contraction and could push USD/CAD downwards, breaking one level of support.
- Well below expectations: Below 47.0: A sharp drop in the index would likely push the pair downwards, possibly breaking a second support level.
For more on the Canadian dollar, see the USD/CAD.
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