USD Weakness Persist Ahead of NFP Even as ISM Hits 2016 High
- ISM Manufacturing rose to match the 2016 high of 53.2
- Economic data has continued to be strong overall
- USD slowed its trek higher on the data, following huge gains over the past few weeks.
The ISM Manufacturing survey for November came in at 53.2 vs expectations of 52.5 and a previous reading of 51.9. This matches the strongest reading for 2016 and marks the fastest pace of growth since February of 2015.
ISM Prices Paid was flat at 54.5 and Construction Spending missed expectations of 0.6%, coming in at 0.5%, still significantly better than the previous reading of -0.4%. More optimism among manufacturers is a possible result of the election, as expectations rise of President-elect Trump working to assist the US manufacturing sector.
This report comes on the heels of upward revisions to 3Q GDP, increasing personal incomes, and skyrocketing consumer confidence. While manufacturing alone is not a hugely significant portion of the US economy, the combination of increasing optimism in manufacturing and positive signs in other parts of US growth-drivers instill an upbeat outlook for the region.
Chart 1: USD/CAD 1-minute Chart (December 1, 2016 Intraday)
Despite the better-than-expected ISM print, USD/CAD showed a limited reaction to the data, with the pair falling back from 1.3394 to 1.33650 following the relase of the data. Nevertheless, the bullish sentiment surrounding the greenback may gather pace going into the end of the year as the Fedeal Open Market Committee (FOMC) is widely anticipated to deliver a December rate-hike,
--- Written by Omar Habib, DailyFX Research
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