EURUSD, H1
The ISM manufacturing index bounced 3.2 points to 61.3 in August, more than retracing the 2.1 point drop to 58.1 in July. This is a new 14-year high and is the second highest going back over two decades. It was at 59.3 last August. Strength was broad based. The employment gauge rose to 58.5 from 56.5, with new orders at 65.1 from 60.2. New export orders were little changed at 55.2 from 55.3. Imports were 53.9 from 54.7. Price paid slipped to 72.1 from 73.2. This is a much stronger than expected report. Additionally, US construction spending rebounded 0.1% in July, after tumbling 0.8% in June (revised up from -1.1%), while the 1.3% May gain was revised down to 0.7%. Residential construction spending was up 0.6% versus the prior 1.0% decline (revised from -0.5%). Nonresidential spending fell 0.3% versus the prior -0.6% (revised from -1.6%). Private construction spending dipped 0.1% after the 0.5% June slide (revised from -0.4%). Public spending climbed 0.7% from -1.7% (revised from -3.5%).
The Dollar rallied after the much better manufacturing ISM outcome, taking EURUSD to near two-week lows of 1.1530 from 1.1545, USDJPY up to 111.41 from 111.15 and USDCAD breached the key 1.3200. US Equity markets remain well underwater on trade concerns.
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Stuart Cowell
Head Market Analyst
HotForex
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