Canadian manufacturing sales data for the month of January is set to release tomorrow. According to a TD Economics research report, manufacturing sales is expected to have dropped 0.3 percent in the month, owing to softer motor vehicle shipments, partly countered by a rebound in petroleum sales.
U.S. auto production recorded the largest fall since the financial crisis in January, which presents downside risks to Canada’s output given the highly integrated supply chains. Other transportation equipment categories are also solid candidates for a fall, with shipments of aerospace products sitting at their highest level since 2016.
A recovery in petroleum output might give a key offset to softness in transportation equipment; nominal petroleum sales dropped 25 percent in the last two months on a combination of lower prices and refinery maintenance.
“Gasoline prices stabilized in January, but lower prices for the industrial sector as a whole should allow real manufacturing sales to outperform the nominal print”, added TD Economics.
At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 113.994 while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -54.4503 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
