Canadian dollar fell after unexpected drop in Manufacturing Shipments

Canadian dollar declined versus its US counterpart on Friday after factory shipments unexpectedly fell at the fastest pace in more than three years in April, which could be treated as a sign of slow down in global demand for Canadian exports.

The national currency of Canada trimmed a second weekly gain, as Manufacturing Shipments indicator decreased by 2.4% to 48.20 billion CAD (47.4 billion USD), Statistics Canada reported. This was the fourth consecutive decline of the indicator in five months. On annual basis, the recorded decrease was 3.3%. Sales of oil products and coals dropped at the fastest rate since the beginning of recession. Oil product sales dipped by 8.8%, sales of industrial products dropped even more, by 11%. These were the weakest results since the summer of 2009. Inventories, however, rose to the highest level since 1992, while wooden material sales registered an increase by 4.9%. Economists, surveyed by Bloomberg, projected that shipments would rise by 0.3%.

“It’s disappointing news, certainly the consensus was expecting a gain, not a significant one, but an up-tick,” Emanuella Enenajor, an economist at Canadian Imperial Bank of Commerce, said by phone from Toronto, cited by Bloomberg. “It means that some of those indicators we saw, those really robust housing-starts numbers, those robust employment numbers, everything is not going hunky-dory. There are still sectors that are struggling, so people looking to go long the Canadian dollar, now might not be the time.”, Enenajor added.

The loonie, as the Canadian dollar is also known, declined by 0.2%, with USD/CAD rising to 1.0174 during the later phase of European session. The pair fell to 1.0148 yesterday, the lowest since May 15th.