Better than expected data from the U.S. economy kept the safe-haven U.S. dollar supported throughout most of the New York trading session, despite the notable losses among U.S. equity indices on Monday’s trading. The lower-yielding U.S. currency was also able to draw support from the ongoing crisis in Ukraine.
The U.S. final manufacturing PMI (purchasing managers’ index) enjoyed an upward revision from 56.7 to 57.1 while the ISM version of the report came in better than expected at 53.2 versus the 52.3 consensus. Personal spending and income also surpassed expectations, with the former printing a 0.4% uptick and the latter showing a 0.3% increase.
Risk Aversion Aided by Weak Data
Over in the euro zone, data was weaker than expected and pushed EUR/USD down before the weekend gap even got filled. Spain’s manufacturing PMI did show a slight improvement but fell short of analysts’ expectations while Italy’s PMI surprised with a decline from 53.1 to 52.3. The region’s final manufacturing PMI was just as expected at 53.2.
As for the U.K., the pound had trouble sustaining its gains against the U.S. dollar and the Japanese yen, thanks to the broad-based risk aversion in recent trading. U.K. manufacturing PMI came in line with expectations of a climb from 56.6 to 56.9.
In today’s Asian trading session, volatility among AUD pairs picked up as the Reserve Bank of Australia (RBA) announced is monetary policy decision. The Australian central bank saw it fit to keep rates unchanged at 2.50% as expected and talk down the Australian’s value as usual. With that, AUD/USD resistance at the .8950 levels held in recent trading.
Up ahead, U.K. construction PMI data is due and a small decline from 64.6 to 63.6 is likely to be printed. In the euro zone, Spanish unemployment change is up for release and another increase in joblessness is projected. The report might show a 74.2K rise in unemployment, slower compared to the 113.1K drop in hiring seen in the previous reporting period.
To contact the reporter of this story: Jonathan Millet at email@example.com