Market awaits Bank of Canada’s rate decision on Wednesday
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Daily Currency Update
The USD/CAD pair dipped very slightly this morning to trade near the 1.36240 range. May’s Canadian S&P Global Manufacturing Purchasing Managers Index (PMI), which surveys purchasing managers in the manufacturing industry, came in at 49.3, this was below both the previous level of 49.4 and the forecasted 50.2 level. This showed a subdued performance in the manufacturing sector due to a fall in output and new order in May. The Bank of Canada (BoC) is expected to release their rate decision on Wednesday. There is speculation that the BoC may begin to cut rates starting with this decision amid BoC governor Tiff Macklem noting that a rate cut is within the realm of possibilities. This decision will be guided by economic data above all else. In oil news, oil dropped by around -0.89% to 77.12 this morning.Key Movers
The US Dollar Index (DXY) dipped slightly this morning by around -0.04% to trade near 104.579. This dip followed the release of manufacturing data showing mostly contraction. May’s USD Final Manufacturing PMI came in at 51.3 versus the expected 50.9. The USD ISM Manufacturing PMI and the USD ISM Manufacturing prices both came in below expectations at 48.7 and 57 respectively. USD construction spending month-over-month came in at -0.1% which showed less contraction than the previous -0.2% reading but more than the forecasted 0.2%.In Eurozone news, the May EUR Hamburg Commercial Bank (HCOB) Manufacturing PMI Final data came in at 47.3. This was just below the previous and forecasted levels of 47.4. The EUR/USD pair rose by around 0.38% so far today to trade near 1.0889. The European Central Bank’s (ECB) rate decision is expected on Thursday. The ECB is forecasted to cut rates by 25 basis points (bps) to 3.75% during this meeting.
The Mexican peso dropped 3.25% against USD this morning. This downward slide came after Claudia Sheinbaum Pardo’s widely expected victory as Mexico’s first female president. The peso’s dip was likely due to the ruling party’s surprisingly strong election, setting them up for a majority that may bring constitutional change and diminish balances.
Expected Ranges
- EUR/CAD: 1.47698 - 1.48159 ▼
- GBP/CAD: 1.73380 - 1.73816 ▼
- AUD/CAD: 0.90548 - -0.90834 ▲
- USD/CAD: 1.36054 - 0.36685 ▼