Friday, October 4, 2013

Ivey PMI and Canadian Dollar power


Ivey PMI and Canadian Dollar power


The Ivey Purchasing Managers Index (PMI) is an economic index which measures the month to month variation in economic activity as indicated by a group of carefully selected - geographically and by sector - purchasing managers of activity to match the Canadian economy as a whole.
The PMI includes both the public and private sectors and it is based on month end data Ivey PMI panel members indicate whether their organizations activity is higher, the same or lower than the previous month across the following five categories: purchases, employment, inventories, supplier deliveries and prices.
The Ivey Purchasing Managers Index is often referred to as the Purchasing Managers Index/PMI. It shows responses to a question: "Were your purchases last month in dollars higher, the same, or lower than the previous month?" A figure above 50 shows an increase while below 50 shows a decrease.                            
Market analysts are always interested in the views of purchase managers on the economy as the latter are considered to be attuned to the latest economic and financial developments. And their expectations could be an indication of future economic trends. Ivey PMI is one of the most important Canadian releases and can affect the direction of USD/CAD.
After long week of weakness for the Loonie against USD and bad expectation about of cost purchasing rise, Canada is about to release it Ivey PMI today at GMT2:00 PM, so What is the market facts about it Ivey PMI?
Is expected to be 52.6 which higher than the last release of August with 51.0 it means that the cost of purchasing will get higher if it gone as expected and vice versa.

In other words if the purchasing power decreased or cost of purchasing increased (both are same), Loonie exchange price will fall, sense inflation levels will rise.

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