Ivey PMIs in Canada turnaround sharply - Oil prices still hurting though.
As we have noted in recent sessions, the CAD has been falling behind the rest of the pack, suffering at the hands of falling oil prices led by the WTI benchmark which has been testing the low $60's recently. While the rest of the majors have been clawing back losses against the greenback, the CAD has been moving the other way, though as noted some time ago, the resistance in the 1.3150-1.3200 area has contained well.
Today's EIA inventory data have done Oil price no favours in showing another build above expectations, and watching the price action, we saw USD/CAD push up again, with the 1.3100 level back on the scene.
On the domestic front, however, Ivey PMI data for Oct shows a more promising picture in the months ahead, with the index coming in well above forecasts at 61.8 for the seasonally adjusted figure, up from 50.4 in Sep.
While the oil price correlation can be erratic, the current status has been worsened by the fall in domestic Oil prices, where WCS has collapsed due to pipeline issues which have deviated demand away from Canada. As long as this continues, we can expect the CAD to be hamstrung, with dip buyers coming in at the mid 1.3000's in the last instance.