Canada’s February Leading Indicators Rose 0.6%; Loonie Pares Gain

By Trang Nguyen,

THETAKEAWAY: Canadian LeadingIndicators Came in Line with Expectations > Surgesin Financial and Manufacturing Components Compensated Declines inHousing Component and Furniture Sales > the LooniePares Gain

Canada’scomposite leading indicators rose for the eighth straight monthin February on significant gain in financial andmanufacturing components. T he report issued byOttawa-based Statistics Canada today showed that the index surged 0.6 percent last month , matching with consensusforecast from Bloomberg News survey. Meanwhile, November readingwas downwardly revised to a gain of 0.4 percent from an advance of0.7 percent initially reported.

CanadianLeading Indicator: J une 2010 toPresent

Prepared by Trang Nguyen

The composite leadingindicator comprised of ten components which significantly affectcyclical activity in the economy and together represent majorcategories of Gross Domestic Product. Six of ten registeredgains in February, two reported decreases and two remainedunchanged. Of six positive contributors, stock index posted alargest percentage gain, up1.7 percent, marking the first increasein five months. Likewise, another financial component money supplycontinued to expand 0.5 percent following 0.8 percent increase inJanuary. Among three manufacturing components, new orders ofdurables goods witnessed the sizable gain in the month, rebounding1.4 percent, contrast with 0.2 percent fall in January. The ratioof inventories to sales also rose for the fourth consecutive month.However, February average manufacturing work week index failed togain for the first time in five months. The housing componentunexpectedly declined after five monthly gains with the housingindex retreating 0.4 percent. Likewise, sales of furniture andappliances slipped 0.3 percent, its sixth consecutive monthlyfall.

USDCAD 1-minute Chart: March 21, 2012

Charts createdusing Strategy Trader – Prepared byTrang Nguyen

Canadian dollarstrengthened versus most of its major trading partners ahead of theNorth American trading session today. Regardless, the loonie trimsgain to some extent in the minutes following the leading indicatorreport. As can be seen from theone-minute USDCAD chart above, the USDCAD droppedabout 10 pips from 0.9908 to 0.9898. T he Relative Strength Indicator lying between 30- and70- territory signaled neither overbought nor oversold reaction. Atthe time this report was written, Canadian dollar fell to C$0.9899per U.S. dollar.

--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com

To contact Trang, email tnguyen@dailyfx.com
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/03/21/032112_Canada_Leading_Indicator_February.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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