Bank of Canada lowers interest rates for the second time this year

Key Movers

The US dollar was up about 0.1% this morning against the CAD after the BoC opted to lower interest rates for the second time this year. The US Dollar Index (DXY) dipped by around -0.26% to the 104.18 level so far today. There was a mixed bag of data from the US Manufacturing Purchasing Manager’s Index (PMI) release. This survey of purchasing managers that helps indicate economic health in the manufacturing industry declined to 49.5 from 51.6. On the other hand, the Services PMI, which measures the activity level of industries with less tangible products, such as hospitality, rose to 56 from 55.3. This release showed the manufacturing industry in the US is still struggling but the services industry appears to be on the rise despite the US having one of the highest benchmark interest rates in the world.

In Eurozone news, the German manufacturing PMI declined to 42.6 versus the 44.0 expected for July, implying the manufacturing sector deteriorated in the last month. Services PMI in Germany had a similar result falling to 52 in July from 53.1 in June, a 4-month low. This data showed that the weak economic conditions in Germany continued.

In the United Kingdom, UK manufacturing PMI was reported at 51.8, slightly higher than the 51.1 that was expected. Meanwhile, UK services PMI came in at 52.4 versus the expected 52.5. This was still above the previous month's level of 52.1. Based on this data, the UK economy seemed to be recovering at a decent pace.