USD/CAD falls to daily lows after upbeat Ivey PMI

US dollar slid to session lows against its Canadian counterpart on Wednesday, as the Richard Ivey School of Business in cooperation with the Purchasing Management Association in Canada said that their PMI rose more than expected in October.

USD/CAD fell to a session low at 1.0412 at 15:10 GMT, after which consolidation followed at 1.0417, losing 0.35% for the day. Support was likely to be received at November 4th low, 1.0398, while resistance was to be met at October 31st high, 1.0489.

According to data by the Ivey School of Business and the Purchasing Management Association in Canada, the seasonally adjusted Purchasing Managers Index (PMI) came in at a value of 62.8 in October, following a reading of 51.9 in September and significantly exceeding preliminary estimates, which pointed a slight advance to 52.0 in October. Values above the key level of 50.0 are usually considered as an indication that activity has increased.

On the other hand, earlier in the day the loonie trimmed recorded gains against the greenback, after Statistics Canada reported that building permits in the country recovered during September, but at a lesser than expected pace, with the main support coming from higher number of permits for residential construction. The overall value of permits, issued by Canadian municipalities, rose 1.7% to 6.54 billion CAD in September compared to August, while a month ago the result has been revised up to a drop of 21.0% from a drop of 21.2% previously. On annual basis, permits rose 0.2% in September. Analysts from Royal Bank of Canada had forecast that the value of building permits will climb 6.0%. Permits for residential construction rose 3.3% in September, after the 4.8% decline in August.

On November 8th an official report is expected to show that Canadian employment probably increased by 11 000 in October, according to median estimate of experts in a survey by Bloomberg News. At the same time, nations unemployment rate probably increased to 7.0% in October from 6.9% a month ago.

Meanwhile, yesterday USD/CAD pair hit session highs after the Institute for Supply Management (ISM) reported that the non-manufacturing PMI for the United States climbed to a reading of 55.4 in October from 54.4 in September, while preliminary estimates pointed a slow down to 54.0 in October.

Investors focus now turns to the crucial set of economic data due out of the United States on Thursday and Friday, as it may provide clues over the timing of a possible reduction of scale of Federal Reserve Banks stimulus program.

Elsewhere, the Canadian currency was steady against the euro, with EUR/CAD cross ticking up a mere 0.01% to trade at 1.4095 at 16:00 GMT. GBP/CAD pair was losing 0.16% on a daily basis to trade at 1.6755 at 16:01 GMT.