The Canadian Dollar (CAD) saw a decline of half a percent against the US Dollar on Monday, as Canadian markets were closed for the Canada Day holiday. However, CAD traders will be back in action on Tuesday with the release of Canadian S&P Global Manufacturing Purchasing Managers Index (PMI) figures. The economic calendar for Canada remains relatively empty this week, with the exception of Friday’s labor figures, which will coincide with the US Nonfarm Payrolls (NFP) report.
On Monday, the US Dollar saw support from safe-haven bids, making it the strongest among major currencies. The Canadian Dollar, on the other hand, was the worst-performing currency. US ISM Manufacturing PMI figures for June came in worse than expected, leading to recession fears and a decline in risk appetite. This comes as the US economy shows signs of slowing down.
In terms of percentage changes, the Canadian Dollar performed the strongest against the Swiss Franc. However, it was down against the US Dollar, Euro, British Pound, and Japanese Yen. The USD/CAD pair reached a multi-week high on Monday, trading near the 1.3750 level. Despite some recovery from last week’s lows, the pair is still facing resistance around the 1.3800 handle.
The Institute for Supply Management (ISM) Manufacturing Prices Paid index, which measures business sentiment regarding future inflation, is an important economic indicator for the US manufacturing sector. A high reading is considered positive for the USD, while a low reading is viewed negatively. As the US and global economies continue to face uncertainty, such indicators will be closely watched by investors and traders for clues about future market trends.
