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ISM Manufacturing PMI drops to 48.2 points

More disappointing data: the ISM Manufacturing PMI dropped to 48.2  points in December, deeper in contraction territory. The employment component, important for the NFP on Friday, dropped from 51.3 to 48.1 points, from growth to contraction. Also  construction spending, a separate report, missed with a drop of 0.4% instead of +0.6% predicted.

The US dollar doesn’t  seem  excited by the disappointing data and continues  remains strong.

The services  sector is much bigger than the manufacturing one, as with most  developed economies, but contraction even in a small  sector and the one that actually produces stuff, is certainly not a positive development.

The US ISM Manufacturing PMI was expected to tick up from 48.6 to 59 points in  December, still in contraction territory. The manufacturing sector has been the weaker link for a long time.

Financial markets opened the year in a sour mood, with falls in stock markets and a “risk off” mood in currencies. We are now seeing a stronger dollar. EUR/USD traded around 1.0835 and USD/JPY at 119.10 before the release.

Earlier, Markit’s final manufacturing PMI was revised from 51.3 to 51.2 points for December.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.