Home > All > Forex News Review – Dollar strengthens after ISM manufacturing data
Posted on May 1, 2012 by Trading Point Investment Research Desk at 7:59 pm GMT
Euro gave up gains after the dollar jumped on better than expected U.S. data. The Institute for Supply Management (ISM) index on the U.S. manufacturing sector unexpectedly rose to 54.8 in April, up from the previous 53.4. This eased concerns the U.S. economy was slowing, after some recent disappointing data. In afternoon New York trading, EURUSD fell to a session low of 1.3203, retreating from an earlier four-week high of 1.3282. Trading volumes were thin due to the My Day holiday that closed most markets in Europe and Asia. The lack of liquidity caused unusually large movements.
Sterling initially dipped after the U.S. data, already vulnerable after weak U.K. purchasing managers index (PMI) indicating modest growth to start the second quarter. But the positive U.S. data helped improve sentiment and buoyed the pound. GBPUSD opened North America at 1.6208 and ended at 1.6219.
Yen weakened as the day progressed. The dollar rebounded from a 2-1/2-month low against the Japanese currency after the ISM data. USDJPY bounced to 80.29, up 0.6 percent on the day. Euro also trimmed losses against the yen. EURJPY edged up to a high of 106.11, up 0.4 percent on the day.
The Canadian dollar hit a session high against its U.S. counterpart after the stronger-than-expected ISM data. The U.S. is Canada’s largest trading partner, so this is positive for the Canadian economy. Rising crude oil prices, a major Canadian export, also helped lift the loonie .
Crude oil rose higher to $106.41 from $104 after the U.S. ISM manufacturing data. An expanding manufacturing U.S. sector will result in higher demand for oil.
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