By James Hao, THE TAKEAWAY: Ivey Index Beats Estimate > Canadian Manufacturing Accelerates > CAD Gains The Canadian dollar advanced as a report issued today showed that manufacturing accelerated in September, adding to evidence that the country’s recovery gathered pace in the third quarter. According to a statement on the University of Western Ontario business school’s website , Canada’s Ivey Purchasing Managers’ Index was printed at 55.7 in September, following the dramatic rebound in August from a six-month low. Readings exceeding 50 are translated into improved manufacturing activities, and the median estimate by the Bloomberg News Survey was 54.8. C AD Ivey Purchasing Managers’ Index : March 2009 to Present Prepared by James Hao The increase in Ivey Index is in line with the better-than-expected RBC Manufacturing Purchasing Managers Index released on Monday. Despite that Canadian economy has been relatively less adversely affected by the sovereign debt crisis in Europe , the speculation of slowing U.S. economy has spurred concerns on Canada’s exports of raw materials . The Loonie has been falli ng off a cliff in recent weeks on crimped demand for commodities, coupled with a job report on Friday that called for unemployment rate to stay at 7.3 percent for the third quarter. USD/CAD 1-minute Chart: October 6, 2011 Charts created using Strategy Trader – Prepared by James Hao Following the release, the USD/CAD pair sank on boosted confidence for the recovery in manufacturing sector, as well as the eased demand for refuge following the triple-digit gains for two consecutive days in stock market. The Canadian currency is traded at C$1.0 428 per U.S. dollar at the time the report is written, and the Relative Strength Indicator (RSI) is oscillating in a range between 30 and 70, indicating the absence of overbought or oversold signs. Market participants are closely watching the non-farm payroll data on Friday, as concerns over American labor market and economic growth may substantially weigh on the Canadian economy . --- Written by James Hao, DailyFX Research Team for DailyFX.com To contact James Hao, e-mail email@example.com
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