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The Canadian Dollar rose 25 pips against the US Dollar on the release of a vastly improved Ivey Purchasing Managers Index for January.
The PMI was reported at 56.8, beating expectations for 51.0 and significantly higher than December’s 46.3 index level, which was the lowest in over four years. A PMI reported above 50.0 indicates expansion in economic activity.
Economic data has risen in importance for CAD traders since the Bank of Canada said in January that the direction of its next rate move depends on data flow. In October, the BoC lowered its growth forecast for 2014 to 2.3% from 2.7%. Therefore, improved economic releases may drive the Loonie higher, as was seen today following the PMI release.
At the time of this writing, USD/CAD has erased earlier gains and is trading right near the daily open at 1.1082. The 8-day low at 1.1036 may next provide support in USD/CAD trading.
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USD/CAD 1-Minute: February 6, 2014
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .