- US manufacturing sector continued to contract in December.
- Greenback came under renewed selling pressure after disappointing data.
The economic activity in the US manufacturing sector contracted at a stronger pace than expected in December with the Institute for Supply Management’s (ISM) PMI dropping to 47.2 from 48.1 in November and falling short of analysts’ estimate of 49.
With the initial market reaction, the greenback came under modest selling pressure and the US Dollar Index retreated to 96.90 area, where it was still up 0.12% on the day.
Further details of the publication showed that the Employment Index dropped to 45.1 from 46.6 in November and the New Orders Index registered its lowest reading since April 2009 at 46.8.
Commenting on the data, “global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the US and China,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee. “Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, while Transportation Equipment is the weakest. Overall, sentiment this month is marginally positive regarding near-term growth.”
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