US ISM Manufacturing PMI overview
The Institute of Supply Management (ISM) will release its latest manufacturing business survey result, also known as the ISM Manufacturing PMI at 15:00 GMT this Wednesday. The index is anticipated to edge higher to 61 in November from 60.8 in the previous month. Given that the Fed looks more at the labour market and inflation than growth, investors will keep a close eye on the Employment and Prices Paid sub-component.
How could it affect EUR/USD?
Ahead of the key release, the US dollar was seen consolidating the previous day's volatile move and failed to provide any meaningful impetus to the EUR/USD pair. That said, a strong rally in the US Treasury bond yields, bolstered by rising bets for a more aggressive policy tightening by the Fed, acted as a tailwind for the greenback. A stronger headline print will reaffirm hawkish Fed expectations and help revive the USD demand. Conversely, a weaker reading might do little to derail the Fed's expected policy path. This, in turn, suggests that the path of least resistance for the greenback is to the upside and down for the EUR/USD pair.
About the US ISM manufacturing PMI
The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector. It is a significant indicator of the overall economic condition in the US. A result above 50 is seen as positive (or bullish) for the USD, whereas a result below 50 is seen as negative (or bearish).
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