The US dollar was unable to to draw support from upbeat data in recent forex price action. US ISM manufacturing PMI posted a stronger than expected expansion in the industry, as the index surged from 53.7 to 54.9, outpacing the consensus at 54.3. Personal spending and income also showed stronger than expected results, while the core CPI price index showed a 0.2% uptick. Initial jobless claims, on the other hand, came up short of expectations. For today, the non-farm payrolls release might be the biggest mover in forex price action and the economy is expected to show a 216K gain in employment.
The euro remained steady to the dollar in recent forex price action, unable to sustain its rally past the 1.3875 mark. Euro zone banks were on a Labor Day holiday, which explains why the shared currency was unable to draw additional support. Spanish and Italian manufacturing PMI are due today, along with the euro zone jobless rate.
The pound continued to edge higher against most of its counterparts, reaching a new 4.5-year high to the dollar. UK manufacturing PMI was much stronger than expected at 57.3, up from an upwardly revised 55.4. UK construction PMI is up for release today and another strong result could lead to more pound gains.
Forex Price Action on NFP Friday
The comdolls showed signs of weakness in recent trading as gains in commodity price levels appeared to be subdued. Earlier today, Australia printed a stronger than expected PPI increase for the quarter while New Zealand showed a 4.0% decline in ANZ commodity prices. No other reports are due from the comdoll economies today.
The franc consolidated for the most part of yesterday’s trading since Swiss banks were on a Labor Day holiday. Swiss SVME PMI is due today and an improvement could keep the franc supported. Meanwhile, the Japanese yen lost ground to major counterparts in recent trading as risk appetite picked up. The Nikkei logged in a 1.27% gain for the day as a news report revealed that the government is coming up with a timeframe for corporate tax cuts. This could compensate for the potential slack that could be caused by the sales tax hike. Data from Japan was stronger than expected, with household spending rising by 7.2% and unemployment holding steady at 3.6%.
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