Manufacturing narrowly shows expansion, USDOLLAR reacts
Source: www.tradingview.com
The ISM manufacturing number came in at 50.2, higher than the 50 that was forecast. As a result, the real rate gapped up on the print (red arrow), and FXCM's USDOLLAR basket followed upwards (green arrow).
Manufacturing is expanding. Notwithstanding how close to the line, the market may view a Fed pivot as less likely. I.e. the Fed has more room to be aggressive in its fight to tame inflation.
Given how close the number was in terms of registering as an expansion, the real rate has come back. However, given the inflation release on Friday, an aggressive Fed is undoubtedly a strong probability.
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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