US Dollar Posts Further Declines Despite Rise in New Manufacturing Orders
- US ISM Manufacturing declines to 57.0, but better than expected
- Pace of new manufacturing orders fastest in 3-years
- USD/JPY falls to 3-day low
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New manufacturing orders accelerated at the fastest pace in over three years in December, according to the Institute for Supply Management, but the US Dollar still continued to set new 3-day lows against the Japanese Yen.
The ISM Manufacturing index was reported at 57.0 for December, beating expectations for 56.8 but down from 57.3 in November, which was a 2-year high. The ISM prices paid index for manufacturing rose to 53.5 in December, while the new orders survey increased to 64.2
Earlier today, initial jobless claims in the United States rose by 339,000 for the week ending on December 28, which was both better than expected and the smallest rise in jobless claims in four weeks.
Better than expected economic releases should provide strength for the US Dollar because outgoing Fed Chairman Bernanke said in December that the FOMC will continue to taper its monthly asset purchases in 2014, depending on the outcome of economic data. However, manufacturing only makes up 12% of the US economy.
That may be why the greenback gains on the better than expected data were short lived, and the US Dollar continued the decline that began near the start of the NY session. USD/JPY fell to a 3-day low at 104.66 shortly after the release of the report, and support may continue to be seen around 104.64/63, by both the 4-day low and the previous 5-year high set on 12/20.
USD/JPY 1-Minute: January 2, 2014
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.