US Dollar (USD) Exchange Rate Ruffled by Manufacturing PMI
The US Dollar exchange rate rallied at the close of last week thanks to a smaller-than-forecast increase in US initial jobless claims and a surprising surge in the Philadelphia Fed index.
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Over the weekend renewed Ukraine concerns helped the safe-haven US Dollar hold on to gains and the currency began trading on Monday little-changed.
However, the ‘Buck’ went on to lose ground following the publication of domestic manufacturing figures.
The US preliminary Markit PMI came in at 55.5 in March, still above the 50 mark separating growth from contraction but down from 57.1 in February.
Economists were expecting a reading of 56.5.
However, despite the decline the reading was still the second highest recorded since the beginning of last year.
Employment in the sector grew at a slower pace than in the previous month and new orders edged slightly lower.
This slightly disappointing manufacturing report follows below-forecast manufacturing PMI for China and a mixed bag of PMI figures for the Eurozone.
The report also confirms that the unseasonably cold US winter continues to have a knock on effect on the performance of the world’s largest economy.
However, with President Barack Obama discussing the Crimea situation with world leaders, higher risk currencies eased lower against the ‘Greenback’.
Bloomberg quoted one global strategist as observing; ‘This is more uncertainty about what’s going on in Ukraine and Russia, an uncertainty that’s clearly more of a European issue with President Obama there.’
Tomorrow US Dollar movement could occur in response to US consumer confidence figures and the nation’s new home sales report.
The confidence gauge is expected to have advanced modestly this month.