US Manufacturing PMI July Preview: Verification of dollar decline
|Manufacturing PMI is forecast to rise to 54.0 in July while new orders and employment indexes are predicted to fall. If PMI is hard-pressed to remain positive, the weakening US economy and dollar could be confirmed, Joseph Trevisani, an analyst at FXStreet, reports.
Key quotes
“The purchasing managers’ index from the Institute for Supply Management is forecast to climb to 54 in July from 52.6 in June. The new orders index is predicted to fall sharply to 46.8 from June’s surprise jump to 56.4. Employment is also forecast to reverse gains dropping to 34.4 in July from 42.1 in June. Prices are projected to rise to 52 in July from 51.3.”
“The PMI numbers point directly at the July non-farm payrolls on August 7. If the deterioration in outlook and especially in employment is steeper than expected the implications for the economy in the third quarter might be considerable. Instead of the spending of returning workers fueling consumption and more hiring the reverse could begin – rising unemployment again cutting into consumer purchases leading to another round of firings.”
“The dollar’s July swoon was based on just such a scenario and the Fed’s likely response. If the PMI figures confirm economic weakness Friday’s profit-taking bounce in the dollar might become an opportunity to reestablish those dollar short positions.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.