Canadian Dollar recovers following US PMIs

The Canadian dollar has recovered following softer US Purchasing Managers Index figures, which have boosted market hopes that the US domestic economy will soften enough to prompt the Federal Reserve to consider rate cuts.

Canada’s latest Retail Sales figures are due on Wednesday, while the broader market focus will be on the US Gross Domestic Product figures due on Thursday. The US Personal Consumption Expenditure (PCE) Price Index will print on Friday.

US PMIs softened unexpectedly on Tuesday, with the S&P Global Manufacturing PMI dropping below the 50.0 level for the first time in four months. The Services PMI component also shed weight, printing at 50.9 versus the previous 51.7. Despite a weaker US Dollar, the Canadian Dollar is mixed against the broader major currency boards due to declining Crude Oil prices.

Canadian Retail Sales for February are expected to recover to 0.1%, while Canadian Retail Sales Excluding Automobiles are expected to hold flat at 0.0%. The US annualized quarterly GDP is forecast to decrease to 2.5% from 3.4%. The US Core PCE Price Index for March is expected to hold steady at 0.3%.