Search ForexCrunch

Yet another disappointing  manufacturing figure from the US: the ISM Manufacturing PMI dropped to 55.5 points, worse than expected. The sliver lining is that the employment component actually rose to 56.8 points. However, new orders fell from 66 to 57.3 points. Another worrying sign came from prices paid, which dropped to a very low level of 38.5 points, partly impacted by oil prices.

The dollar is  retreating after making huge gains earlier. EUR/USD was already too close to 1.20 at 1.2008, and it is now at 1.2027.

In addition, construction spending fell by 0.3%, contrary to expectations for a rise of 0.4%.

The ISM Manufacturing PMI was  expected to slide to 57.6 in December from 58.7 points in November. This serves as a hint towards the all important Non-Farm Payrolls which is released next week.

The dollar was on a roll prior to the publication, with EUR/USD trading at levels last seen in 2010, very close to 1.20.

We also had other breakouts: GBP/USD fell below 1.54, USD/CHF hit parity and USD/CAD broke above 1.17.

Earlier, Markit’s manufacturing PMI was revised up from 53.7 to 53.9 points.