The dollar is currently mixed in comparison to its major competitors Wednesday, as investors await an announcement from the FOMC. The FOMC will make an announcement at 2:15 PM ET, following the conclusion of its 2-day meeting. The U.S. currency is currently holding steady in comparison to the Euro, up against the pound sterling and slightly higher against the Japanese Yen.
Policy decisions in Europe are also forthcoming. The European Central Bank and the Bank of England are both expected to make announcements on Thursday. The ECB is expected to announce some new measures, after recent comments from Mario Draghi that he will defend the Euro. The Bank of England is likely to keep its policy on hold on Thursday, even as the economy slipped deeper into recession and inflation showed signs of easing.
The dollar has remained basically flat in comparison to the Euro on Wednesday, holding steady around the $1.2300 level.
The downturn in the Eurozone manufacturing sector gathered momentum at the start of the third quarter, final data from Markit Economics showed Wednesday. The manufacturing Purchasing Managers' Index fell more than initially estimated to 44 in July, a 37-month low, from 45.1 in June. The flash estimate for July was 44.1.
Germany's manufacturing sector contracted more than initially estimated in July, and the rate of fall accelerated from the previous month, data from a survey by Markit Economics and BME showed Wednesday. The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector dropped to 43 in July from 45 in June, and hit the lowest level since June 2009. The flash estimates had indicated a decline to 43.3.
Business conditions across French manufacturing sector deteriorated further in July with the relevant indicator falling to its lowest level since May 2009, a survey by Markit Economics showed Wednesday. The purchasing managers' index fell to a 38-month low of 43.4 in July from 45.2 in June. The flash survey results showed a reading of 43.6.
The greenback has strengthened versus the pound sterling on Wednesday, rising to a 4-session high of $1.5586.
The U.K. manufacturing sector contracted at the fastest rate since March 2009 due to substantial declines in output and new orders, suggesting a sharp downturn in the economy at the start of the third quarter.
The seasonally adjusted purchasing managers' index fell to 45.4 in July from a revised reading of 48.4 in June, data from a survey by the Chartered Institute of Purchasing & Supply and Markit Economics showed Wednesday. Economists were expecting the index to fall to 48.4 from the 48.6 estimated initially for June.
Overall shop price inflation in the United Kingdom slowed in July to 1.0 percent from 1.1 percent in June, the British Retail Consortium reported Wednesday.
The buck has also rebounded from Tuesday's 2-month low of Y77.898 versus the Japanese Yen, back to around Y78.200.
Employment in the U.S. private sector increased by much more than anticipated in the month of July, according to a report released by payroll processor Automatic Data Processing, Inc. on Wednesday.
The report showed that the private sector added 163,000 jobs in July following a downwardly revised increase of 172,000 jobs in June. Economists had expected an increase of about 120,000 jobs compared to the increase of 176,000 jobs originally reported for the previous month.
Fueled by strong growth in the residential sector, U.S. construction spending increased for the third straight month in June. According to figures released Wednesday by the Commerce Department, overall U.S. construction spending grew by 0.4 percent in June to a seasonally adjusted annual rate of $842.1 billion.
While the growth was slightly weaker than the 0.5 percent growth predicted by most economists, it comes atop revised figures that showed already strong growth in May and April growing by even more than previously reported.
While the Institute for Supply Management released a report Wednesday showing a modest increase by its index of U.S. manufacturing activity, the index rose by less than expected and continued to point to a contraction in the sector.
The ISM said its purchasing managers' index inched up to 49.8 in July from 49.7 in June, although a reading below 50 indicates a contraction in manufacturing activity. Economists had been expecting the index to climb to a reading of 50.2.
by RTT Staff Writer
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