The economic activity in the US' manufacturing sector expanded at a stronger pace in July than it did in June with the ISM's Manufacturing Purchasing Managers' Index (PMI) improving from 52.6 to 54.2. This reading came in better than the market expectation of 53.6.

Further details of the publication revealed that the New Orders Index rose to 61.5 from 56.4, the Production Index edged higher to 62.1 from 57.3 and the Employment Index climbed to 44.3 from 42.1.

Commenting on the data, "in July, manufacturing continued its recovery after the disruption caused by the coronavirus (COVID-19) pandemic," said Timothy R. Fiore, Chair of the ISM's Manufacturing Business Survey Committee. "Panel sentiment was generally optimistic (two positive comments for every one cautious comment), continuing a trend from June."

Market reaction

With the initial reaction, the US Dollar Index pulled away from daily highs and was last seen gaining 0.32% on the day at 93.75.

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