Canadian Dollar to US Dollar (CAD/USD) Exchange Rate Slumps to Three-Day Low
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According to the RBC Canadian Manufacturing Purchasing Managers Index (PMI), the Canada’s manufacturing sector expanded slower than economists’ expectations.
PMI came in at 52.9 for April, down slightly from March’s figure of 53.3 and was worse than the fall to 53 expected by economists.
“Though we saw a slight dip in April it is encouraging to see Canada’s manufacturing sector continue to grow for what is now the thirteenth month in a row,” said Craig Wright, senior vice-president and chief economist at RBC.
“Our bottom line continues to be that a strengthening US economy alongside a more competitive Canadian Dollar will support improving conditions for Canada’s manufacturers in the near-term.”
The US Dollar was able to push higher against the ‘Loonie’ after data showed that consumer spending in the world’s largest economy jumped to its highest level in five years.
The data released by the Washington-based Commerce Department showed that consumer spending increased by 0.9% in March, the highest rise seen since August 2009.
The positive spending data was enough to keep the ‘Greenback’ higher even as a report showed that the number of US citizens claiming jobless benefits rose more than expected in the week ending April 26.
The number of claimants rose by 14,000 to 344,000, higher than economist expectations for a figure of 320,000.
US Dollar forecast to make further gains
The US Dollar is expected to make further gains against its Canadian relation later in the session.
If today’s Markit manufacturing PMI and ISM indexes come in strongly we can expect to see the US Dollar be supported.
The Canadian Dollar is currently trading against the British Pound in the region of 0.5395 and is trading against the US Dollar in the region of 0.9104.