Key points
- The Canadian dollar weakens against the US dollar, as the market waited for the manufacturing and wholesale sales data of May 2024.
- Wholesale sales in April grew by 2.4%, reaching $83.3 billion, excluding petroleum products and oilseeds.
- Higher-than-expected readings would be positive for CAD, whereas lower-than-expected readings would be negative.
This article is a follow up to: Canadian dollar holds steady close to one-week high
The Canadian dollar saw a slight dip against the US dollar, with the USDCAD currency pair quoted at 1.38106. This movement comes as the markets anticipate the release of preliminary manufacturing and wholesale sales data for May from Canada.
Picture: CAD losing strength against USD in anticipation of key economic data releases, as observed on the VT Markets app.
Manufacturing sales data
In April, manufacturing sales rose by 1.1% to $70.8 billion, primarily driven by increases in the sales of transportation equipment, primary metals, and chemical products. This data is crucial as it measures the change in the overall value of sales at the manufacturing level, indicating the health and growth of the manufacturing sector.
If May’s preliminary data shows a similar or greater increase, it could signal continued strength in the Canadian manufacturing sector, potentially boosting the CAD. Conversely, weaker-than-expected data could weigh on the currency.
Wholesale sales data
Wholesale sales in April increased by 2.4%, reaching $83.3 billion, excluding petroleum products and oilseeds. This metric reflects changes in the total value of sales at the wholesale level, providing insight into economic activity and demand within the wholesale market.
Strong wholesale sales data for May could further support the the Canadian dollar by indicating robust economic activity and consumer demand.
What you should pay attention to
Given the current market conditions, short-term traders should keep a close eye on the upcoming data releases.
A higher-than-expected reading for manufacturing and wholesale sales data will likely bolster the strength of the Canadian dollar, while disappointing data could lead to further weakening.
Additionally, global economic factors, such as changes in oil prices and US economic policies, will also play a significant role in the movements of USDCAD.
