Photo by Michelle Spollen on Unsplash

• USD/CAD trades in positive territory near 1.3855 in Friday’s early Asian session. 
• US S&P Manufacturing PMI climbed to 52.3 in May, stronger than expected. 
• Lower crude oil prices could weigh on the commodity-linked Loonie.  

The USD/CAD pair trades with mild gains around 1.3855, snapping the four-day losing streak during the early Asian session on Friday. The US Dollar (USD) edges higher against the Canadian Dollar (CAD) due to the stronger-than-expected Purchasing Managers Index (PMI) data.

Data released by S&P on Thursday showed that US Global Composite PMI rose to 52.1 in May's flash estimate from 50.6 in April. Meanwhile, the Manufacturing PMI improved to 52.3 in May from 50.2 in Sprli, while the Services PMI rose to 52.3 from 50.8. The Greenback strengthens against the CAD in an immediate reaction to the upbeat PMI data.

Additionally, the US Initial Jobless Claims  for the week ending May 17 dropped to 227K, compared to the previous week of 229K, according to the US Department of Labor (DOL) on Thursday. This reading came in below the market consensus of 230K. Continuing Jobless Claims went up 36K to reach 1.903M for the week ending May 10.

A fall in Crude Oil prices could weigh on the commodity-linked Loonie. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value. 

Later on Friday, traders will keep an eye on the Canadian Retail Sales data for April, which is expected to show an increase of 0.7%. In case of stronger-than-expected outcome, this could lift the Canadian Dollar and create a headwind for the pair

More By This Author: