The US Dollar has weakened against a number of its most traded peers after manufacturing activity made an unexpected decline in May raising concerns that the USA’s economic recovery is more fragile than first thought.
According to the Institute for Supply Managements Index of Purchasing manager’s activity declined to 49.0 in May, a fall from the 50.7 level recorded in April. A figure below 50 signals contraction. Analysts had been expecting the ISM to hold steady at 50.7.
Factory activity is thought to have waned due to a combination of the introduction of federal budget cuts and the ongoing weakness in overseas markets.
“Manufacturing is bearing the brunt of the slowdown,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit said before the report. “Businesses are managing inventory levels very well. Once demand picks up, we’ll see manufacturers respond quickly.”
The last time the ISM manufacturing index fell below the 50 mark was in November 2012, shortly after the US east coast was hit by massive storm Sandy.
The gauge for new orders dropped to 48.8 from 52.3, while a measure of employment edged down to 50.1 from 50.2. Production fell to 48.6 from 53.5.
The exports index fell to 51.0 from 54.0, while imports held up relatively better, slipping slightly to 54.5 from 55.0.
Against the British Pound the ‘Greenback’ has been trading down for the majority of Monday’s session. The decline came after PMI data for the UK showed that manufacturing activity increased by its fastest pace in 14 months in May.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6547
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7678
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0373
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 100.1146
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0357
(Correct as of 15:30pm GMT)
Comments are closed.