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US Dollar Mixed After Bearish ISM Manufacturing

US Dollar Mixed After Bearish ISM Manufacturing

Dylan Jusino, Contributor

Talking Points:

- Insititute for Supply Management Manufacturing (ISM) Survey came in below expectations at 54.8 versus 56.5.

- Japanese Yen rallies against the US Dollar dipping to fresh low in May, 111.43.

May came in with a vegence against the US Dollar as economic data has been anything but favorable thus far. Following bearish consumer expenditure, the Institute for Supply Management (ISM) Manufacturing survey print came in below estimates at 54.8 versus 56.5. Prices paid beat expectations at 68.5 versus 67.5. Also, employment came in at 57.5 versus 64.5 previous. Overall, the soft data was mixed.

The ISM Manufacturing Survey reflects business conditions in the US. It includes key subcomponents, which are ISM’s Prices Paid and Employment. These key components provide significant economic health indications considering they precede other market data such as, Non-Farm Payrolls and the Consumer Price Index. The headline figure is expressed as a index based on survey responses. The ISM manufacturing indicator is the aggregate of the results for all categories.

As stated previously, April ISM Manufacturing came in weaker than expected. Perhaps markets are beginning to see a material shift in sentiment as it plays catch up with lackluster hard data. Last month, the University of Michigan Sentiment survey missed estimates at 97.0 versus 98.0 expected. Looking ahead, markets will be looking for continued bearish sentiment to identify a material shift.

Here’s a summary of the ISM data that is having a negative impact on the US Dollar:

- USD ISM Manufacturing (APR):54.8 actual versus 57.2 previous

- USD ISM Prices Paid (APR): 68.5actual versus 70.5 previous

- USD ISM New Orders (APR): 57.5 actual versus 64.5 previous

- USD ISM Employment (APR): 52.0 actual versus 58.9 previous

See the DailyFX economic calendar for Monday, May 1, 2017

Chart 1: USD/JPY15-minute Chart (May 1, 2017 Intraday)

As shown in the 15-minute chart above, the ISM Manufacturing release garnered a positive reaction for the Japanese Yen against the US Dollar. Leading up to the data print USDJPY traded at 111.6and dipped to 111.43. At the time that this was written USDJPY erased all ISM losses trading around lower at around 111.62.

--- Written by Dylan Jusino, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.