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USD/CAD rises as strong US PMI offsets weaker Canadian data
The US S&P Global Composite PMI climbed to 53.6 in July, while Canada saw producer prices fall after a prior rebound, leaving USD/CAD near 1.4095.
USD/CAD was trading around 1.4095, up about 0.06% on the day, as stronger US economic data gave the US dollar a modest advantage while the Canadian dollar lagged.
FXStreet cited a rise in the US S&P Global Composite Purchasing Managers Index to 53.6 in July from 51.9 in June, with Services PMI improving to 53.6 and Manufacturing easing to 53.8 from 53.9. The outlet also noted S&P Global Market Intelligence data being consistent with around 2% annualized GDP growth in the third quarter, though it said supply chain disruptions and price pressures remain.
In Canada, producer prices showed renewed weakness, with the Industrial Product Price Index down 1.4% month over month in June after a revised 1.4% increase in May, and the Raw Material Price Index falling 6.9% below market expectations. FXStreet added that softer inflation readings and expectations that the Bank of Canada could stay more accommodative than the Federal Reserve are weighing on the Canadian dollar.
The story said investors are looking ahead to next week's Fed meeting, while also pointing to weaker oil prices and diverging monetary policy expectations as factors limiting CAD support, with uncertainty around new Trump administration tariffs adding to the mixed backdrop. Scotiabank strategists described the CAD as nearly flat on the session, but warned gains could remain fragile as trade tensions linger.