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October 01, 2019
The U.S. Dollar strengthened in the trading session, especially against the Euro. Eurozone economic data reportedly worsened making the currency nicknamed Single Currency collapse. As a rival with higher yields, the U.S. Dollar has strengthened even though US economic data itself is somewhat mixed.
IHS Markit reports that the U.S. Manufacturing PMI for September 2019 rose from 50.3 to 51.0. These results are also better than expectations which predicted stagnation. Stronger output and rising new orders were the main contributors who raised the headline for the U.S. Manufacturing PMI this month.
Along with the release of the U.S. Manufacturing PMI data, the PMI Services data was also released. However, the data which have a lower impact on the U.S. Dollar are not very bright. The US Services PMI only edged up from 50.7 to 50.9, failing to meet expectations of a rise of 51.5.
The U.S. Dollar Index, which measures the performance of the USD against other major currencies, rose 0.18 percent to around 98.64 while EUR / USD dropped 0.22 percent to 1.0993. The increase in the U.S. Dollar was more due to market concerns over the weakness of the Eurozone economy, thus making the Euro hit by selling action.
In addition to the recession signal shown from German data, the statement of European Central Bank (ECB) President Mario Draghi in Brussels, also mentioned that indications of a rebound in Eurozone economic growth were not yet visible. Speculators have raised their Net Long bets against the U.S. Dollar.
Slumping U.S. Consumer Confidence has weakened the USD tonight. In addition, the recovery of the Euro after the release of German economic data also pressured the U.S. Dollar. The U.S. dollar weakened against major currencies in the trading session. Because, from a series of U.S. economic data released tonight, CB Consumer Confidence experienced a weakening.
CB Consumer Confidence has the highest impact on the U.S. Dollar. This raises concerns about the outlook for U.S. economic performance. The Conference Board, which released U.S. Consumer Confidence data, showed that the index for September 2019 dropped from 134.2 to 125.1. These results were far below the expectations of economists at 133.5.
When this news was written, EUR / USD edged up 0.19 percent to 1.1014. According to Credit Agricole analyst Manuel Oliveri, the Euro will slowly stabilize and strengthen to around 1.12 per U.S. Dollar in the coming months.
This data also experienced a downward revision for the previous month's index. Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said that the decline was affected by trade and tariff conflicts in August. This data is released every month by the independent research institute The Conference Board (CB).
In line with Franco, Michaels Pearce, an economist from Capital Economics said that the consumer spending might still be touched by the wars of trade. It has been a key strength to the economy of U.S. in months, and it may be affecting badly to the consumer confidence.
The U.S. Consumer Confidence Index measures the level of optimism in the country's economy as indicated by the level of savings and consumer spending. This is in responding to the report, the Dollar Index (DXY), which measures the strength of the U.S. Dollar against other currencies, fell 0.25 percent to 98.36.
In addition to disappointing U.S. domestic data, today's bright data from the Eurozone made the Euro strengthen against the U.S. Dollar. German Business Confidence for September is reported to have risen for the first time in six months. The report allayed fears of a recession due to yesterday's German Manufacturing PMI data.
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