The Canadian Dollar (CAD) stumbled against the US Dollar (USD) on Thursday as Purchasing Managers Index (PMI) figures signaled recession risk, prompting a shift to safe-haven assets. With limited economic data in Canada until next week, all eyes are on Friday’s US Nonfarm Payrolls (NFP).

Investors are treading carefully, hoping for weak US data to prompt rate cuts by the Federal Reserve (Fed) without triggering a broader economic slowdown.

Market Update: Canadian Dollar’s Decline Amid US Dominance

  • July’s Canadian S&P Global Manufacturing PMI dropped to 47.8, reflecting ongoing manufacturing decline in Canada.
  • US ISM Manufacturing PMI fell to 46.8, missing forecasts and raising concerns of an economic downturn.
  • US Initial Jobless Claims surpassed expectations, indicating a slowdown in hiring.

Technical Analysis: USD/CAD Strengthens in Risk-Off Environment

The CAD weakened against the USD and JPY but gained against GBP and AUD. USD/CAD is testing highs near 1.3850, with potential to reach 1.3900.

Key Factors Driving the Canadian Dollar

  • Bank of Canada interest rates
  • Oil prices
  • Economic health
  • Inflation
  • Trade balance

Understanding these factors can help investors navigate the fluctuations in the Canadian Dollar.

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