Canada’s dollar slides against US counterpart on PMI data

The Canadian Dollar is easing back against the US Dollar as the 2024 trading year begins, with the Canadian S&P Global Manufacturing Purchasing Managers’ Index (PMI) falling to a 43-month low.

The US Manufacturing PMI component also fell below expectations, keeping market risk appetite low and propping up the US Dollar on risk aversion. The Canadian Manufacturing PMI reached a multi-year low of 45.4 in December, declining from November’s 47.7.

The US Manufacturing PMI for December also missed the mark, printing at a four-month low of 47.9. US Construction Spending also slumped in November, growing by a scant 0.4% versus the market forecast of 0.5%. Markets have begun to walk back their previous high bets of the Fed rate cuts through 2024, with money markets pricing in a median of 150 basis points of rate cuts by year-end.

US data features heavily on the economic calendar this week, with 2024’s inaugural trading week rounding out the action with Friday’s US Nonfarm Payrolls (NFP). The US ISM Manufacturing PMI figures for December are forecast to tick upwards from 46.7 to 47.1, followed by the Fed’s Meeting Minutes from the latest Open Market Committee meeting.