CANADIAN DOLLAR HESITATES ON RISK APPETITE STUTTER

• The Canadian Dollar stumbled against the Greenback on Thursday.
• Canada and US PMIs gave a soft print in July.
• US NFP looms large on Friday, markets hoping for continued softening.

The Canadian Dollar (CAD) tripped and fell against the US Dollar (USD) on Thursday after a misprint in Purchasing Managers Index (PMI) figures flashed warning signs of lurking recession risk in the data, sparking a fresh round of risk-off market sentiment. Market flows reversed direction as investors pulled out of alpha-seeking instruments and piled into safe-haven assets like the Greenback.

Canada will fall by the wayside as economic data remains limited until next week’s Canadian labor figures, and markets will be entirely focused on this Friday’s upcoming US Nonfarm Payrolls (NFP). 

Markets continue to walk along an incredibly sharp knife edge of hoping for bad economic data that will kick off a rate-cutting cycle from the Federal Reserve (Fed), but not so bad that a broad economic slowdown might render rate cuts pointless.