Canadian Dollar Goes Higher as US Manufacturing Expands

The Canadian dollar climbed today after a report showed that the US manufacturing sectors was expanding last month with faster pace than was anticipated by analysts, bolstering positive market sentiment.
Institute for Supply Management reported that the US manufacturing Purchasing Managers’ Index was up from 53.4 in March to 54.8 in April. China’s PMI rose a little from 53.1 to 53.3. The positive news from China and the United States lifted mood of investors that was hurt by fears of the crisis in Europe.
Bank of Canada Governor Mark Carney suggested in today’s speech that higher interest rates “may become appropriate”. Canadian Finance Minister Jim Flaherty said that fundamentals are supportive for Canada’s currency. Manufacturers reacted positively for the appreciation of the currency and Canadian policy makers have no reason to take measures for weakening the loonie.
USD/CAD was down from 0.9874 to 0.9855 and EUR/CAD slid from 1.3068 to 1.3046 as of 22:02 GMT today. CAD/JPY climbed from 80.79 to 81.23.

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