Canadian economic data released today were weaker than expected, causing the loonie to fall against the greenback, though not significantly as the U.S. 4th of July holiday resulted in light trading on both sides of the border.
The pace of Canadian manufacturing activity growth fell for a third straight month in June as both production and new order volumes slowed, according to data released today.
The RBC Canadian Manufacturing Purchasing Managers’ Index dropped to 52.8 in June from 54.8 in May. This was the third decline since April, indicating that new factory orders are slowing down as growth in the Canadian economy has weakened.
“The moderation is consistent with the trends we are seeing around the globe pointing to a temporary soft patch in the economic recovery,” Craig Wright, chief economist at Royal Bank of Canada, said in statement.
Canada’s manufacturing sector has recently weighed down the country’s economic recovery. Export-reliant manufacturers have struggled with soft demand from south of the border. The U.S. is Canada’s major trading partner. Also Canada’s strong currency has affected exports, by making their goods more expensive in foreign markets.
Meanwhile, the Industrial Product Price Index (IPPI) edged down 0.2% in May caused by a fall in demand for metals. Also, the Raw Materials Price Index (RMPI) fell 5.2% from April due to a rise in oil prices.
Since the release of the data, USDCAD has been steadily rising from 0.9598 pre-news (12:30GMT) to 0.9607 two hours post news.