The dollar strengthened against a basket of currencies throughout yesterday, as trade tensions continue to rock the markets. The dollar is seen as a safe haven by investors – so they piled into it and sold emerging market currencies. However, the greenback’s moves would certainly not have been harmed by the extremely positive manufacturing PMI reading that was released yesterday afternoon.
The markets had expected a dip to 57.7 in August from 58.1 the previous month, but the actual figure was a whopping 61.3. It is the highest expansion in factory activity since May 2004, as new orders, production, employment and inventories all increased at a faster rate. It is worth noting that manufacturers continue to be concerned about tariff-related activity, but there is no doubt that the sector is in a period of rude health. This is in sharp contrast to the UK.
July’s balance of trade figures will be released around 1:30pm today. The deficit is expected to have widened from $46.3 billion to $50.1 billion. We will also see mortgage applications up to 31 August 2018.
