Yesterday afternoon had a flurry of US data points released ranging from mortgage applications to the more impactful August Manufacturing PMI. Whilst mortgage applications were down 2.4% versus July, indicating a slowing housing market, the manufacturing PMI did outperform expectations and the previous reading with a strong 59.9 reading. This shows continued expansion to the US manufacturing sector and a positive for the US dollar. The UK and EU also released manufacturing readings that came out slightly higher than the US reading; this allowed both currencies to continue to gain back some ground versus the dollar that was lost last week. The UK posted a strong 60.3 and the EU, a 61.4 reading for August.
Overnight, both Australia and New Zealand showed strong readings in their trade balances with both countries posting a trade surplus to keep a hold on their current currency rates after lockdowns have been implemented in some states of Australia and nationwide in New Zealand. Readings over the next few months will show the impact on trade that these lockdowns have had on each of the economies.
Today in the UK, there will not be any economic data coming out. In Europe, Swiss GDP has increased albeit slower that expected. The EU Producer Price Index has come in above expectations which has helped the Euro continue gains against the pound and dollar. This afternoon will see this week’s reading for the US jobless claims – how many new claims for the unemployment benefit have been made. The US will be looking to again reduce this versus last week to give the dollar a boost. EURUSD could see further movement today once the US releases are digested by the market.
Have a great day.
Chris Allan, Senior Relationship Manager
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