Home Daily Commentaries DXY remains strong as PMI data signals continued inflation

DXY remains strong as PMI data signals continued inflation

Daily Currency Update

The US dollar index (DXY) continued to strengthen on the expectation that US interest rates will stay higher for longer. The S&P Global Manufacturing Purchasing Manager’s Index (PMI) came in at 49.8, above the 48.9 forecasted level and the previous 47.6. This was a new high for the PMI since the last high in April. This was the fifth straight month of contraction and the tenth month in the last 11 that has shown contraction. The ISM manufacturing PMI came in at 49 which was also above forecasts and the previous reading of 47.8 and 47.6 respectively. ISM Manufacturing Prices were at 43.8, which was slightly below the forecast of 48.9 and the previous 48.4. Construction spending month-over-month was up 0.5%, just below the forecasted 0.6% increase and the previous 0.9% increase.

Key Movers

PMI out of Europe showed the Spanish data at 47.7, Italian data at 46.8, and French data at 44.2. All were above their forecasted levels. Meanwhile, the German PMI was at 39.6, below its forecasted 39.9 and the overall Eurozone PMI at 43.4, exactly in line with forecasts. European unemployment data was also released at 6.4%, which was right on par with forecasts.

In Great Britain, the month-over-month Nationwide House Price Index was released at 0% movement, this was above the forecasted -0.4% and well above the previous -0.8%. In year-over-year house prices, the index fell -5.3%. This was less than the forecasted -5.7% dip, with all regions recording annual house price falls in Q3.

While the Canadian market is silent today with markets closed for a national holiday, the Canadian Manufacturing PMI was released at 47.5, slightly below the previous 48 mark. Oil is down 0.94% to $89.86 a barrel at the time of writing.

Expected Ranges

  • EUR/USD: 1.0517 - 1.0592 ▼
  • GBP/USD: 1.2132 - 1.2220 ▼
  • AUD/USD: 0.6376 - 0.6445 ▼
  • USD/CAD: 1.3557 - 1.3666 ▲