Daily FX Trading Update: US ISM Manufacturing PMI Disappoints – Feb 3, 2015

Daily FX Trading Update: US ISM Manufacturing PMI Disappoints - Feb 3, 2015

The US dollar had a mixed performance in recent FX trading, as traders are hesitating to take huge positions ahead of the top-tier releases this week. Data from the US was mostly weaker than expected, as the ISM manufacturing PMI fell from 55.5 to 53.5 in January while personal spending showed a surprise 0.3% decline. The core PCE price index stayed flat as expected, confirming the Fed’s decision to sit on its hands for now until inflation picks up. Only the US factory orders report is up for release today.

The euro was stuck in consolidation against most of its FX trading counterparts in the absence of top-tier reports from the euro zone. Spanish and Italian manufacturing PMI came in stronger than expected while the region’s reading showed a 51.0 figure as expected. The Spanish unemployment change figure is up for release today and an increase of 83.4K in joblessness is expected.

FX Trading Events

The pound seemed to be in a weak spot in yesterday’s FX trading sessions, as it edged lower to the dollar and yen. UK manufacturing PMI came in slightly better than expected at 53.0 versus the projected 52.9 figure. The construction PMI is up for release today and it might show a drop from 57.6 to 56.9, reflecting a slower expansion in the industry.

The franc edged lower to its FX trading counterparts yesterday when the Swiss manufacturing PMI came in below expectations. The reading tumbled from 54.0 to 48.2 instead of improving to the estimated 54.2 figure, indicating that the industry contracted during the period. Swiss trade balance is up for release today and a smaller deficit is eyed.

The Japanese yen gave up some of its recent gains when traders booked profits in recent trading. There were no major reports released from Japan then and there are none due today, indicating that risk sentiment could drive yen FX trading price action moving forward.

The comdolls made a bit of recovery to the dollar and yen in recent trading as risk appetite appeared to improve. Data from China was weak though, as the official manufacturing and non-manufacturing PMI indicated a slowdown. Earlier today, Australia printed a stronger than expected building approvals report and a smaller than expected trade deficit. The New Zealand dairy auction is scheduled later today and might cause price swings for the Kiwi.

To contact the reporter of the story: James Brennan at james@forexminute.com