US Dollar Claws Back Losses on Solid Manufacturing PMI Data
USD PRICE OUTLOOK: US DOLLAR BULLS TAKE A STAND AFTER LATEST PMI DATA
- US Dollar recovering lost ground following the latest release of monthly PMI data
- USD price action supported by overall solid readings on US economic activity
- DXY Index turns positive on the day as EUR/USD tumbles and USD/JPY spikes
The Greenback is perking up as the US trading session comes online and market participants digest August 2020 manufacturing PMI data just released by the Institute of Supply Management. Prior to the opening bell on Wall Street, the broad-based US Dollar Index was deep in the red, down nearly 0.4% intraday. In large thanks to the overall solid PMI report that topped market expectations, however, the US Dollar has since caught a bid and erased earlier losses.
US DOLLAR INDEX PRICE CHART: 5-MINUTE TIME FRAME (01 SEP 2020 INTRADAY)
According to the DailyFX Economic Calendar, the ISM Manufacturing PMI for August 2020 was clocked at 56.0, which beat the median forecast looking for a reading of 54.5 on the headline index. A reading above 50 indicates economic activity is expanding. Further evidence that the US economy stands on relatively strong footing as business activity recovers from the coronavirus pandemic likely serves as a welcomed development for US Dollar bulls – particularly as Eurozone PMI data slumps and their growth trajectory diverges from that of the United States.
The DXY Index now trades in positive territory on the day with EUR/USD price action dropping 73-pips from intraday highs and USD/JPY climbing 52-pips from intraday lows. EUR/USD and USD/JPY are the two largest components of the DXY Index at 57.6% and 13.6%, respectively.
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