Canadian dollar eases ahead of NFP data

The Canadian dollar was mixed against major currencies on Thursday, with some gains against the US dollar. Markets are settling following Wednesday’s Federal Reserve outing, which saw Chair Jerome Powell strike a more hawkish tone than expected, knocking equity markets lower and driving risk-off flows into the safe haven US dollar.

Canada’s S&P Global Manufacturing Purchasing Managers Index (PMI) increased in January, but the index of production optimism remains contractionary, falling below 50.0. US ISM Manufacturing PMIs likewise exceeded estimates, but remained below 50.0.
US initial jobless claims surprisingly increased, exceeding the four-week average for US jobless benefits seekers. The Canadian Manufacturing PMI rose to 48.3 from 45.4 the previous month, marking a remarkable recovery from December’s three-and-a-half-year low. US first jobless claims for the week ending January 26 were 224K, compared to the expected 212K.

The US ISM Manufacturing PMI rose to 49.1 in January, the highest level in 16 months. The trading week will close with another high-impact US Nonfarm Payrolls number on Friday, with job additions expected to fall to 180K in January from 216K in December.