The rebound in the stock market and carry trades has helped to take the high yielding Australian, New Zealand and Canadian dollars higher. Oil prices continued to rise, which has helped to contribute to the gains that we saw today in the CAD. Canadian IVEY PMI is due for release tomorrow.
The market is looking for the index to decline sharply from 67.4 to 56.0 in the month of July. However given the recent jump in retail sales and overall resilience of the Canadian economy, we do not expect the drop to be that significant. In fact, PMI could still hold the 60 level. Australia on the other hand will reporting service sector PMI, we are looking for a stronger number.