Jul 01 2008
US ISM Manufacturing On Tap
The USD saw bullish momentum against its major currency rivals yesterday. The greenback saw positive trends throughout the trading day as the Chicago PMI rose and beat forecasts and even more importantly, the Crude Oil lost some grounds and was traded at around $140 a barrel. The USD was on a bearish trend last week and traders were looking for some positive news to help the USD rally back. After trading at above 1.58 versus the EUR, the USD regained some grounds and the cross was traded at the mid 1.57 zone.
Yesterday’s bullish trading by the USD was sparked by the economic release of the Chicago PMI. This indicator showed that business activity in the US midwest increased unexpectedly in June and is a sign of future economic growth. In an interview yesterday, U.S. Treasury Secretary Henry Paulson said that a strong dollar is in the U.S. interest and added that he believes “the long-term economic fundamentals of the United States are solid”. Last but not least, the USD gained further momentum with the decline of the Crude Oil price to around $140 a barrel after reaching a record high during the beginning of the trading day yesterday.
Looking ahead to today, there are a few economic releases expected. The most important economic data from the U.S. will be the ISM Manufacturing Index, which is expected to be lower than the previous value and might be a negative sign for the American growth. Simultaneously, there will also be releases of the ISM Manufacturing Prices and Construction Spending, which are both expected to stay around the same rates as their previous measuring. With lots of attention to the housing market, it might be interesting to see the Domestic Vehicle Sales, which is most Americans’ second biggest purchase and is expected to fall compared to its previous measuring. Overall, it seems like today will not be a good trading day for the USD and traders might see bearish trends for the greenback.
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