The Canadian manufacturing report came in close to expectations, although the lack of growth for total shipment volumes was a tad disappointing.
November 16, HotForex – The Canadian manufacturing report came in close to expectations, although the lack of growth for total shipment volumes was a tad disappointing.
Canadian Manufacturing Report Close to Expectations
Canada manufacturing shipments nudged 0.2% higher in September after a revised 0.5% decline in August shipment values (was -0.4%).
By sector, gains were narrowly based in September, as 8 of 21 industries saw increases. A 3.1% gain in transportation industry sales led the way in September, which was driven by a 6.1% bounce in motor vehicle assembly and a 1.9% climb in motor vehicle parts.
Production picked-up following motor vehicle assembly plant shutdowns in July and August. Total sales volumes fell 0.1%, which is rather disappointing for the September GDP outlook. We are maintaining our 0.1% estimate for September GDP for the time being, but this report tips the risk around our projection to the downside.
AUDCAD and USDCAD Outlook
USDCAD pulled below, the overnight bottom of 1.3150, and currently traded to 1.3138 lows, following the Canadian manufacturing data.Stronger oil prices kept a cap on the pairing since Thursday’s close, as WTI crude tops $57.70. Next floor for the pair is at 1.3100 and Resistance at 1.3193.
Conversely, AUDCAD spiked up to 0.9597 highs reversing up to 50% of yesterday’s losses. If the pair manage to close at the bottom of the hour above 38.2% Fib. retracement level, we could see a retest of the PP level at 0.9600 level and also yesterday’s high at 0.9647.
AUDCAD and USDCAD, H1
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