FXStreet (Delhi) – Ned Rumpeltin, European Head of Currency Strategy at TD Securities, suggests that there may be additional pressure on the USDCAD as we expect today's US ISM manufacturing survey to slip into contractionary territory. Key Quotes “Last week, we noted short term downside risks for USDCAD amid decent Canadian GDP growth and month-end rebalancing flows that would push against the USD. Friday's industry level real GDP report for August printed in line with market expectations for a 0.1% m/m increase. This was largely driven by the goods-producing sectors, including manufacturing and extraction.” “That said, the prior three months of GDP data were negatively revised but we are still tracking Q3 growth at 2.5% (annualized) which is bang on the Bank of Canada's estimate. This leaves us not seeing any monetary policy implications from this. Nonetheless, we remain cautious on the Canadian growth outlook, which will require USDCAD to remain at elevated levels to support the recovery.” “There has been a clear slowing trend in manufacturing (which matters greatly for Canadian exporters). We think the optics of the first sub-50 reading in three years against the backdrop of a more hawkish Fed will act as a significant headwind for USDCAD.” “We note that 1.3050/80 has been a key support level but we would not rule out a test of 1.30 if ISM matches our forecast expectations. We will closely be watching the new orders index which is expected to print below 50. We remain strategically long USDCAD however, as the Fed is much closer to lifting rates than the BoC. Fair value stands at 1.3095 at the open.” For more information, read our latest forex news.