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US Dollar Extends Decline as US PMIs Slip

US Dollar Extends Decline as US PMIs Slip

Justin McQueen, Strategist

US Dollar Analysis & News

  • Markit PMI Misses Expectations
  • USD Back Down to Pre-FOMC Levels

Markit PMI Misses Expectations

US Markit Composite PMI for September fell to 54.5 from 55.4, whereby the services and manufacturing figures fell to 54.4 and 60.5 respectively, both missing analyst estimates. Supply chain issues and capacity shortages remain the key factors behind the slump, linked in part to the spread of the Delta variant. IHS Markit note that supply chain delays show no signs of easing and thus output looks set to remain constrained.

US PMI Takes a Hit from Supply Constrains

USD Reaction Muted

In response the PMI report, the USD index has extended its pullback with the greenback now trading at pre-FOMC levels. That said, the data is unlikely to be a key factor in dictating price action in the greenback with the Federal Reserve on course to taper. Instead, short term FX movements will be determined by the ebb and flow of risk appetite, with particular attention being placed on Evergrande.

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