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03.06.2024, 07:25

Forex Today: Busy first week of June kickstarts with PMI data

Here is what you need to know on Monday, June 3:

Following the previous week's choppy action, financial markets remain subdued on the first trading day of June. S&P Global will release revisions to May Manufacturing PMI data for Germany, the Eurozone, the UK and the US on Monday. Later in the session, the ISM Manufacturing PMI report will be featured in the US economic docket, alongside Construction Spending data for April. 

The US Bureau of Economic Analysis reported on Friday that inflation in the US, as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, rose 2.7% on a yearly basis in April, matching March's increase and the market expectation. In the same period, the core PCE Price Index increased 2.8% as forecast. The US Dollar (USD) struggled to preserve its strength following the PCE inflation data. After registering small losses for the week, the USD Index holds steady above 104.50 in the European morning on Monday. Meanwhile, US stock index futures trade in positive territory at the beginning of the week.

US Dollar PRICE Last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the Japanese Yen.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.02% 0.08% 0.13% -0.12% -0.17% -0.36% -1.28%
EUR 0.02%   0.07% 0.19% -0.08% -0.22% -0.43% -1.23%
GBP -0.08% -0.07%   0.06% -0.19% -0.28% -0.44% -1.33%
JPY -0.13% -0.19% -0.06%   -0.30% -0.32% -0.41% -1.43%
CAD 0.12% 0.08% 0.19% 0.30%   -0.07% -0.24% -1.21%
AUD 0.17% 0.22% 0.28% 0.32% 0.07%   -0.14% -1.08%
NZD 0.36% 0.43% 0.44% 0.41% 0.24% 0.14%   -0.93%
CHF 1.28% 1.23% 1.33% 1.43% 1.21% 1.08% 0.93%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Stock Market Today: Nifty opens at record highs, cheers a likely PM Modi third term.

EUR/USD edged higher on Friday and closed the week virtually unchanged. The pair holds steady at around 1.0850 to start the European session.

GBP/USD failed to make a decisive move in either direction in the previous week. The pair fluctuates in a narrow channel slightly below 1.2750 early Monday.

Bank of Japan (BoJ) Executive Director Takashi Kato said on Monday that the BoJ has no plans to immediately unload its exchange traded funds (ETF) holdings. USD/JPY ignored those comments and was last seen trading flat on the day near 157.30.

The data from China showed that Caixin Manufacturing PMI edged higher to 51.7 in May from 51.4 in April. This reading came in slightly better than the market expectation of 51.5. AUD/USD showed no reaction to this data and was last seen trading marginally lower on the day at 0.6640.  

Australian Dollar remains flat, while US Dollar improves ahead of ISM PMI.

Gold spent the previous week moving up and down in a narrow channel. XAU/USD continues to move sideways above $2,320 to start the new week.

Economic Indicator

ISM Manufacturing PMI

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The indicator is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that factory activity is generally declining, which is seen as bearish for USD.

Read more.

Last release: Wed May 01, 2024 14:00

Frequency: Monthly

Actual: 49.2

Consensus: 50

Previous: 50.3

Source: Institute for Supply Management

The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) provides a reliable outlook on the state of the US manufacturing sector. A reading above 50 suggests that the business activity expanded during the survey period and vice versa. PMIs are considered to be leading indicators and could signal a shift in the economic cycle. Stronger-than-expected prints usually have a positive impact on the USD. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are watched closely as they shine a light on the labour market and inflation.

 

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