Home NewsForex Market News US PMI shrank for two consecutive months, DXY continued to rise and stopped the euro’s decline | Anue Juheng

US PMI shrank for two consecutive months, DXY continued to rise and stopped the euro’s decline | Anue Juheng

by WOOWinvest
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US PMI shrank for two consecutive months, DXY continued to rise and stopped the euro’s decline | Anue Juheng

The report showed that private sector activity in the United States shrank again in August, raising the prospect of the Federal Reserve (Fed) slowing down the pace of interest rate hikes, the dollar index ended a multi-day rally, and the euro rose slightly against the dollar from a 20-year low.

In late New York trading on Tuesday (23rd), the ICE U.S. Dollar Index (DXY), which tracks the U.S. dollar against six major currencies, fell 0.46% to 108.54.

The U.S. Composite Purchasing Managers’ Index (PMI) compiled by S&P Global fell to 45 in August, its lowest level since February last year, as soaring inflation and tight financial conditions dented demand for services and manufacturing. Attempt to achieve by raising interest rates.

So far in March, the Fed has raised the federal funds rate from nearly 0% to a range of 2.25-2.50%, with more room for more rate hikes expected in the coming months in an effort to tame stubbornly high inflation.

Ed Moya, a market analyst at Oanda, said the manufacturing and services PMIs fell far short of expectations, raising doubts about the strength of the economy and supporting the argument that Fed Chairman Jerome Powell may be more inclined to slow the pace of tightening.

The euro rose 0.26% to $0.9967 against the dollar, after falling to $0.9899 as low as intraday, continuing to test a 20-year low. The euro has fallen by more than 12% against the dollar so far this year and nearly 3% since August, amid worries that the energy shock will continue to push up inflation and make a recession in Europe a reality.

Holger Schmieding, chief economist at Berenberg, said worries about the European economy amid soaring gas prices were the main drag on the euro. Russia’s announcement of maintenance on the Nord Stream 1 pipeline stoked fears of energy supply disruptions and sent wholesale natural gas prices in Britain and the Netherlands soaring on Monday.

On the other hand, economic data showed that the S&P Europe Composite PMI fell further to 49.2 in August from 49.9 in the previous month. Although the contraction rate was smaller than expected, the economic outlook remained bleak.

In order to revive economic growth, the Beijing government has recently adopted easing measures, and the continued tightening of the Fed has put pressure on the RMB. The offshore RMB against the US dollar hit another 2-year low during the session, and edged up 0.21% to 6.8520 RMB by the time of writing.

Sterling snapped a 4-day losing streak and was up 0.55% at $1.1829 against the dollar. Earlier data showed that Britain’s composite PMI slipped to 50.9 in August, with service sector activity almost unchanged, but the manufacturing PMI fell into contraction, the lowest since the outbreak of the virus in May 2020.

As of Wednesday (24th) Taiwan time about 6:00 Price:

The dollar index was at 108.5240. -0.4158% The euro against the US dollar (EUR/USD) was quoted at $0.9969 per euro. +0.2817% GBP/USD (GBP/USD) was quoted at $1.1827. +0.5355% The Australian dollar against the US dollar (AUD/USD) was quoted at 1 AUD=0.6925. +0.7419% The U.S. dollar against the Canadian dollar (USD/CAD) traded at 1.2952 Canadian dollars. -0.7510% The US dollar against the Japanese yen (USD/JPY) was quoted at 136.75 yen. -0.5238%

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