Canadian Dollar Higher As Ivey PMI Beats Forecast

Canadian Dollar Higher As Ivey PMI Beats Forecast

By: Simon Furman | Where To Trade | On:6-10-2014 13:34
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Key Highlights

  • Canadian Ivey Jumps higher and posted a solid increase of around 7 points from 50.9 to 58.6.
  • German factory orders came as a disappointment and registered a healthy decline of 5.7% in August 2014.
  • Euro zone Sentix investor confidence also fell more than expected and registered a decline to -13.7.
  • Euro zone Retail Purchasing Managers' Index (PMI) decline from 45.8 to 44.8.
  • Euro was unfazed by the disappointing data during the London session, and was seen trading higher.

Canadian Ivey PMI

There was an important economic release lined up during the New York session in Canada. The Canadian Ivey PMI was released by the Richard Ivey School of Business. The market was expecting an increase from 50.9 to 53.0 in by the end of September 2014. However, the outcome was very positive, as the Canadian PMI rose to 58.6. This was way above the last reading of 50.9. The report added that the Employment Index was 53.0, the Inventories Index was 60.0, the Supplier Deliveries Index was 42.7 and the Prices Index was 71.6 for September 2014.  

PMI

The Canadian dollar was boosted right after the release, and it traded higher not only against the US dollar but also against the currencies such as the Euro and the British pound. The most affected pair was USDCAD. The pair traded lower and broke an important support area around the 1.1200 level. This move has opened the doors for a further downside towards the 1.1150 level.

German Factory Orders

There were a couple of releases in the Euro zone during London session, including the German factory orders and the Euro zone Sentix investor confidence. First in the line was the German Factory orders, which was released by the Deutsche Bundesbank. The market was expecting orders to decline by 2.7% this time around. However, the outcome was even worse, as the German Factory orders registered a decline by 5.7% in August 2014, compared to the rise of 4.9% in July 2014. The previous reading was revised up from 4.6% to 4.9%. So, the overall result was very disappointing. In terms of yearly change the German Factory orders declined by 1.3%, which is a lot lower than the previous gain of 5.9%. The report mentioned that the slowdown was primarily in foreign orders, which was down by 8.4%, and the domestic orders fell by 2.0%.

There was one more release during the late London session, which was the Euro zone Sentix investor confidence. The market was expecting a decline of about 4 points this time, but the outcome was way below the expectation, as the Euro zone Sentix investor confidence fell from -9.8 to -13.7.

The EURUSD pair totally avoided both releases, and traded higher during the London session. The pair traded close to the 1.2560-80 resistance area where the Euro sellers successfully defended the mentioned area. On the downside, the 1.2520-10 might continue to act as support, and as long as the pair stays above the stated level more upside cannot be denied.

Simon Furman

Simon Furman

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Simon Furman is one of the best financial analyst with 27 years of trading experience

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