Dollar gains broadly after upbeat U.S. manufacturing PMI: Oct 25, 2016

Market Review - 24/10/2016   22:25GMT  

Dollar gains broadly after upbeat U.S. manufacturing PMI

The greenback rose against majority of its peers on Monday as the release of upbeat U.S. manufacturing PMI increased chances of a Federal Reserve rate hike later this year.  
  
In a report, market research group Markit said that its flash manufacturing purchasing managers' index (PMI) rose to 53.2 in October from the prior month's final reading of 51.5. Analysts had expected no change to September's reading.  
  
Versus the Japanese yen, although the greenback traded sideways in Asia and briefly dropped to session low at 103.72, price pared its losses and rallied to an intra-day high at 104.32 in New York morning, helped by the release of U.S. manufacturing PMI.  
  
The single currency weakened to session low at 1.0860 in Asian morning before rising to an intra-day high at 1.0900 ahead of New York open due partly to upbeat German PMIs together with cross-buying of euro especially vs sterling before retreating in New York on dollar's strength following upbeat U.S. data, price later retreated to 1.0869.  
  
Markit Economics said that German manufacturing PMI rose to a seasonally adjusted 55.1, from 54.3 in the preceding month. Analysts had expected German manufacturing PMI to remain unchanged at 54.3 last month.  
  
Although the British pound dropped to session low at 1.2186 in Asian morning, price rallied to an intra-day high at 1.2249 in early European morning. However, cable pared its gains and retreated to 1.2197 in New York morning on dollar's strength, short-covering later lifted price back to 1.2246 near New York close.  
  
In other news, UK PM Theresa May said 'has been clear UK already discussing future trading relationships with third countries; disappointed by stalled talks over trade deal with EU n Canada, will do everything it can to help get it back on track; will be series of parliamentary debars on Brexit, including on high level negotiating principles; firmly believe that if we approach Brexit talks in constructive spirit, can ensure smooth departure.'  
  
Data to be released on Tuesday:  
  
France business climate, Germany Ifo data, Italy industrial orders, U.S. redbook sales, home price, consumder confidence and economic optimism.