Home Daily Commentaries US manufacturing PMI contracts for ninth consecutive month

US manufacturing PMI contracts for ninth consecutive month

Daily Currency Update

The US Manufacturing Purchasing Manager’s Index (PMI), which measures the strength of the manufacturing sector, was reported at 46.4. It was 0.4 higher than the previous month but still below the 50-level threshold which would indicate expansion. This is the ninth consecutive month with PMI reporting below the 50 level, indicating continued contraction. The US Job Openings and Labor Turnover Survey (JOLTS) reports 9.582 million job openings for June versus the expected 9.610 million. This is lower than the previous month’s revised reading of 9.610 million as well. While this is still a high reading historically speaking, this figure is relatively low for the year. As expected, most data from the US recently shows evidence that the economy is struggling to expand amid the higher interest rates imposed by the Federal Reserve.

Key Movers

The eurozone unemployment rate hit a record low of 6.4%. This signals a strong labor market despite weak economic growth in the region.

The Reserve Bank of Australia (RBA) has left rates unchanged at 4.1% for the second month in a row. Interest rates in Australia are currently at their highest level in 11 years while inflation is still at 6% in Q2, far above Australia’s target of 2-3%. There is likely still more room for the RBA to raise rates, however, the recent rate hold has weakened the AUD.

The UK Manufacturing PMI has dropped to 45.3, the lowest reading so far this year. The UK economy is continuing to struggle through higher interest rates.

Expected Ranges

  • EUR/USD: 1.09523 - 1.10030 ▼
  • GBP/USD: 1.27557 - 1.28412 ▼
  • AUD/USD: 0.66053 - 0.67235 ▼
  • USD/CAD: 1.31792 - 1.32992 ▲