The dollar has weakened slightly against both the Euro and the pound sterling Monday. The better than expected manufacturing PMI report from China and the stronger than anticipated U.S. ISM manufacturing report helped to alleviate some the growth concerns that have plagued investors over the past few weeks. This led to a rally in stock markets both in Europe and the United States.
China's official purchasing mangers' index, a gauge of manufacturing sector performance, increased unexpectedly in March, easing concerns of a marked slowdown in economic growth in the world's second-largest economy.
The China Federation of Logistics and Purchasing (CFLP), which conducts the survey on behalf of the National Bureau of Statistics, said on Sunday that the PMI improved to 53.1 in March from 51 in February. The reading was the highest since March last year. Economists had expected the score to fall to 50.8.
Activity in the U.S. manufacturing sector continued to expand in the month of March, according to a report released by the Institute for Supply Management on Monday, with the index of activity in the sector rising by slightly more than anticipated. The ISM said its index of activity in the manufacturing sector climbed to 53.4 in March from 52.4 in February, with a reading above 50 indicating growth in the sector. Economists had expected the index to edge up to a reading of 53.0.
The dollar has given back some of its early gains against the Euro this afternoon and has settled near the middle of a week-long range, around $1.3325.
The Eurozone unemployment rate rose to a record high in February, reflecting increasing divergences between countries. The seasonally adjusted jobless rate rose to 10.8 percent, the highest since 1997, from 10.7 percent in January, data from Eurostat showed Monday. The outcome was in line with economists' forecast. The rate was 10 percent in February 2011.
Eurozone manufacturing downturn worsened as initially estimated in March, final data from Markit Economics showed Monday. The Purchasing Managers' Index fell to 47.7 in March, a three month low, from 49 in the previous month. The final reading matched flash estimate.
The greenback has bounced back slightly from the new 4 1/2 month low of $1.6062 it reached in early trade versus the pound sterling, to around $1.6025.
Activity in the British manufacturing sector increased to the highest level in ten months in March, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed Monday. The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector rose to a ten-month high of 52.1 in March from 51.5 in February, which was revised up from 51.2. The sector expanded for the fourth consecutive month.
The buck has also declined against the Japanese Yen on Monday, pulling back from a 4-session high of Y83.295, to around Y82.150.
The Bank of Japan's quarterly Tankan survey revealed on Monday that sentiment for its large manufacturers' index was unchanged in the first quarter of 2012, holding steady at a score of -4. That missed expectations for an increase to -1. The outlook for the next quarter also fell shy of forecasts, coming with a score of -3 versus expectations for a 2 after showing -5 in the previous three months.
U.S. construction spending took a big hit in the month of February, according to figures released Monday by the Commerce Department, with revised January figures also showing a much larger than previously reported decline. Commerce Department estimates put overall U.S. construction spending at a seasonally adjusted annualized rate of $808.9 billion, a 1.1 percent drop from revised January estimates. The steep monthly drop in February marks the largest drop in overall construction spending since July of 2011.
by RTT Staff Writer
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