XM - Analytics

XM

563.25 6.75/10
70% of positive reviews
Real

European Session – Dollar weakens on weak US ISM manufacturing

Posted on February 2, 2015 by the XM Investment Research Desk at 3:42 pm GMT

dollar_2486524b

The Swiss franc was one of the weakest performing currencies today amid speculation that the Swiss National Bank is intervening in the currency markets. There were some reports that the central bank wants to adopt an unofficial band between 1.05 and 1.10 for the EURCHF exchange rate.

 

The euro rose to 1.0587, its highest since January 15 when the SNB removed the EURCHF peg. The dollar rose to 0.9344. francs.

 

The single currency remains vulnerable as the market focuses on developments in Greece. For the moment investors remain on the sidelines and as a result the euro traded within its recent range against the dollar, which has been between 1.1261 and 1.1367 since January 29. Data out of the Eurozone today showed that the final manufacturing January PMI came in as expected at 51.0. This was in line with the earlier flash estimate of 51.0 and slightly above December’s reading of 50.6.

 

Sterling had a choppy European session, spiking to 1.5087 on UK data before dipping to test the key 1.5000 level.  A broadly weaker dollar after weak US ISM data helped the pound back up.

UK data today showed the Markit/CIPS UK Manufacturing PMI rose to 53.0 from an upwardly revised 52.7 in December, beating expectations of 52.6.

 

Meanwhile, in the US, consumer spending fell in December according to the personal spending index which declined 0.3%. This was the biggest drop since September 2009, after a 0.5% gain in November and worse than the 0.2% fall that was forecast.

 

A further blow to the dollar was given by the ISM manufacturing PMI which fell in January to 53.5 from 55.1 the month before. The reading was below expectations of 54.5.

 

The dollar fell the most against the yen, touching a low of 117.14 after the ISM data. The European session high was 117.84 yen.

 

Today’s data comes after fourth quarter US GDP data on Friday that showed the US economy expanded at a 2.6% annualized pace, which was less than what economists expected at 3%.



To leave a comment you must be or register

By visiting our website and services, you agree to the conditions of use of cookies. Learn more I agree