Canadian dollar dips on soft manufacturing data
USD/CAD closes the gap
USD/CAD gapped lower at yesterday's open on higher oil pries but the move has now almost completely erased.
Oil prices are modestly lower today but the catalyst was economic data. Manufacturing sales fell a surprise 1.3% in July compared to a -0.1% reading expected. Plant shutdowns in autos and metals were largely responsible for the outsized decline but all industry groups were lower and Canadian inventories are swollen, which could mean more underperformance ahead.
The next level to watch is Friday's high of 1.3287. Beyond that, the 200-day moving average is at 1.3309 but in my experience, the DMAs are rarely tipping points for the loonie. Anyone trading CAD is better off watching oil right now than the technicals.