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The Greenback drew some support from upbeat PMI but the big winner was the Loonie, which got a boost from strong data and a pickup in crude oil prices.

  • U.S. flash manufacturing PMI up from 52.0 to 53.2 vs. 52.3 forecast
  • U.S. flash services PMI unchanged at 54.2 vs. 54.3 estimate
  • U.S. existing home sales dipped from 5.62M to 5.52M vs. 5.59M consensus
  • Canadian wholesale sales increased by 0.8% vs. projected 0.5% uptick

Major Events/Reports

Upbeat U.S. flash PMI

Uncle Sam’s reports were slightly better than expected, allowing the dollar a sigh of relief ahead of this week’s FOMC decision on expectations that the central bank might maintain its optimistic stance.

The flash manufacturing PMI from Markit jumped from 52.0 to 53.2 to reflect a stronger pace of industry expansion in July versus the projected rise to 52.3. Underlying components of the report revealed that the pickup was spurred by gains in new orders, output, and employment. Input buying was also strong, buoyed by improving demand conditions and higher sales.

Meanwhile, the services PMI came in at 54.2, just a notch below the 54.3 estimate in July. The previous month reading was upgraded from 53.0 to 54.2 to indicate a faster pace of growth than initially reported. Respondents noted that the improving economic backdrop and greater willingness to spend among clients contributed to the strongest upturn in new work in two years.

U.S. equity indices, however, closed mostly in the red for the day on mixed earnings results:

  • Dow 30 index is down 66.90 points to 21,513.17 (-0.31%)
  • S&P 500 index is down 2.63 points to 2,469.91 (-0.11%)
  • Nasdaq is up 23.05 points to 6,410.81 (+0.36%)

Crude oil rebounds on Saudi announcement

Black Crack jumped after the meeting among oil producers at the start of this week, as Saudi Arabia promised that they would take “significant measures” to keep prices afloat.

In particular, Saudi Arabia’s energy minister Khaled al-Falih said that they would limit the country’s exports to 6.6 million barrels per day, a reduction of 1 million barrels per day from their average shipments last year, to decrease the global glut.

He also pointed out that global stockpiles are down by 90 million barrels, citing that the OPEC output deal has been able to produce results. However, he also acknowledged that additional steps need to be taken to further curb output since inventories are still at historically-high levels.

Another factor that contributed to the pickup in crude oil was Nigeria’s pledge to maintain output at 1.8 million barrels per day even though it is technically exempted from the OPEC agreement.

  • WTI crude oil ticked up 1.3% to $46.34 per barrel
  • Brent crude oil rose 1.1% to $48.60 per barrel

Major Market Mover(s):


The oil-related Loonie took advantage of the commodity’s recovery and the stronger than expected Canadian manufacturing sales figure.

USD/CAD edged down from a high of 1.2542 to a low of 1.2484, CAD/JPY popped back up from 88.17 to 88.91, EUR/CAD inched from 1.4610 to 1.4560, and GBP/CAD tumbled to the 1.6300 handle.

Watch Out For: