According to Markit, the IHS flash manufacturing PMI in the US edged down to 52.5 index points in December from the recorded 52.6 in November.
Despite these results, however, the index as a whole seems to have stabilised in the fourth fiscal quarter following the especially weak performance that was observed over the summer period.
US Manufacturing PMI. Image source: TradingEconomics.com
While it is too early to be talking about sustainable growth in the industry, the marginal progress in manufacturing is evocative of likely stabilisation in investors’ confidence.
This is especially important given the recent breakthrough in the trade negotiations’ impasse between the US and China, which resulted in the signing of phase one agreement between the two countries.
With the lifting of some of the tariffs that were imposed on Chinese imported goods, global trade uncertainty has subsided, leading to a likely improvement across multiple industry sectors, including manufacturing.
This news has impacted the dollar positively despite the currency already being ‘too strong’, as suggested by some market analysts.
Meanwhile, the EURUSD has corrected some of its last week gains by falling close to the 1.11286 price level.
It is more than likely for the pair to extend its bearish swing by falling to the support level at the 38.2 per cent Fibonacci retracement at 1.10740.
EURUSD 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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