The British Pound to Canadian Dollar rallied on Thursday as global manufacturing reports had an impact on the currency market.
Although China’s manufacturing PMI advanced modestly in April (achieving 50.4 and supporting commodity-driven currencies like the Canadian Dollar) the ‘Loonie’ slumped against the Pound after the British currency was boosted by an unexpectedly strong UK manufacturing report.
In a sign that the UK’s economic strength persisted as the second quarter kicked off, the UK Markit manufacturing PMI surged from 55.8 to 57.3.
Sterling was additionally boosted by impressive UK house price figures.
While the UK economy appears to be going from strength to strength, the same can’t be said for Canada.
On Thursday a Canadian report revealed a slight slowing in the pace of expansion in Canada’s manufacturing sector.
The Canadian manufacturing PMI (compiled by the Royal Bank of Canada) showed an easing in output, with the measure dipping from 53.3 in March to 52.9 in April.
However, the measure remains above the 50 mark separating growth from contraction and the ongoing repercussions of the poor winter weather must be taken into account.
Although a gauge of new orders edged from 53.4 to 52.6, the employment index jumped from 50.8 to 52 – its best reading since November of last year.
In a statement published with the data, RBC economist Craig Wright asserted; ‘Our bottom line continues to be that a strengthening US economy, alongside a more competitive Canadian Dollar, will support improving conditions for Canada’s manufacturers in the near term.’
As North American trading progressed the CAD to USD pairing fluctuated as a result of a mixed bag of US reports.
While US initial jobless claims climbed unexpectedly, public spending increased and the ISM manufacturing measure beat expectations. The gauge rose from 53.7 to 54.9 in April.
A lack of Canadian news could limit ‘Loonie’ movement before the weekend, but the US non-farm payrolls report may also have a considerable impact on currency volatility.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5392,
Canadian Dollar,,US Dollar,0.9103,
Canadian Dollar,,Euro,0.6565,
Canadian Dollar,,Australian Dollar,0.9827,
Canadian Dollar,,New Zealand Dollar,1.0573,
US Dollar,,Canadian Dollar ,1.0985,
Pound Sterling,,Canadian Dollar,1.8549,
Euro,,Canadian Dollar,1.5236,
Australian Dollar,,Canadian Dollar,1.0174,
New Zealand Dollar,,Canadian Dollar,0.9397,
[/table]
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