The dollar is weak against both the pound and the euro this morning, as the US ISM manufacturing figure fell into contraction territory for the first time in three years. The worse-than-expected reading came in at 49.1% for August. This has ended a 35-month period where manufacturing PMI averaged 56.5%.
Details show that the US-China trade war is harming production and also suggest that the Federal Reserve could cut rates again before Christmas. Speaking in an interview yesterday, St. Louis Federal Reserve President, James Bullard, said that the Fed should cut interest rates by a half a percentage point when holding its meeting in two weeks. He said that the trade war is a “reckoning” for the world economy.
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