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Euro holds gains as markets await US ISM manufacturing PMI

Consensus calls for the ISM headline to rise to 54 from 53.3 in June, with the Prices Paid component seen easing to 70.3.

Reported · Written up by our desk · Major Pairs

Investors are focused on the release of the US Institute for Supply Management’s (ISM) July Manufacturing Purchasing Managers Index on Monday, a widely watched gauge of activity in the US manufacturing sector and a key input to expectations for growth.

The FXStreet preview notes that the market consensus looks for the headline PMI to improve to 54 from June’s 53.3. It also expects the ISM Prices Paid component to ease to 70.3 from 73 in June and 82.1 in May.

The report could influence currency trading because stronger readings may reinforce views that the US manufacturing sector remains resilient despite uncertainty tied to the Middle East and elevated energy prices. FXStreet adds that investors will also watch the Employment sub-index for a clearer picture, since it has been improving but has largely stayed in contractionary territory over recent years.

Heading into the data, FXStreet says the US Dollar Index, which measures the USD versus a basket of currencies, is near seven-week lows amid improved risk appetite following a pause in Iran hostilities and a sharp USD/JPY reversal after coordinated US-Japan FX intervention. The euro is consolidating gains around 1.1525 versus the dollar ahead of the 14:00 GMT release.

Latest closeUSD/JPY 157.40 ▼1.7%|Dollar index 99.80 ▼0.2%

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