The Canadian economy went through a major contraction during the lockdown months, as most major economies did. The economic recovery after the reopening came later and was slower than in other countries. Now, the economy is weakening again.

Core retail sales declined in July, while the CPI (Consumer Price Index) inflation turned negative in August. Yesterday, the Ivey PMI report for September posted a sharp decline for that month. If the data keeps softening, the CAD will turn bearish, sending the USD/CAD pair higher, although crude oil also has a say in the Canadian Dollar.

Sharp fall in the Ivey PMI index

• IVY Purchasing Managers Index (SA) for September weaker at 54.3 points vs. 67.8 in August
• Unadjusted index comes in at 61.1 points
• The index was at 48.7 points a year ago
• 3-month average is 63.5 points
• Employment 53.8  points vs. 56.1 in August
• Inventory 44.1 points vs. 50.9 in August
• Supplier deliveries 40.7 points vs. 51.3 in August
• Price is 60.3 points vs. 57.6 in August