US economic growth remains stable, according to the IHS Markit PMI composite for July, published yesterday at 16:45 (GMT 3). According to Markit’s preliminary report, the PMI composite for July is at 55.9 points, one its best values over the last 3 and a half years.
The report also notes that the US’ private sector is fairly optimistic about the coming months, having seen a steady rise in orders for their products and services. As such, US companies are hiring more people, which in turn increases employment. What’s really interesting is that US business activity has increased on account of internal demand rather than external trade.
IHS Markit has projected US GDP in Q3 to grow by about 0.7 – 0.75% QoQ, or about 3% YoY. This shows that economic growth in the US has upped the pace in the second half of 2018. Markit reported year-on-year growth of around 2 – 2.5% for the US economy in the first half of 2018.
As far as I’m concerned, if IHS Markit’s projections come true, US economic growth in Q3 will likely outstrip that of other major global economies, such as the UK, Japan, or the Eurozone, which is expected to grow by around 1.8 – 2% YoY. So, if everything continues this way, and barring any unforeseen circumstances on the geopolitical stage, we could see the dollar become relatively stable over the coming months and will most likely see it rise in value on most of the major currency pairs.