The rather bad economic data from the States continued on Tuesday with the ISM Non Manufacturing PMI reading. The outcome of 53.8 compared to the estimate of 55.1 certainly didn’t help overall investment sentiment. The USD continued to trade near the weaker parts of its recent range against the EUR and GBP. Wall Street was able to turn in slight gains, but they were unconvincing. Today will be a quiet day of releases and traders will focus on tomorrow’s Unemployment Claims numbers. Friday will also be relatively tranquil for government data, meaning that investors will have to make their decisions based on their existing insights. The commodity markets have turned rather bearish, Crude Oil has come off of its recent highs and the grains find themselves trading without much demand.
The broad markets have exhibited caution for a couple of months and as the summer gets longer investors may be starting to look forward to September and October. By then investors will have a firmer grasp on what the U.S. economy is going to show regarding its third quarter results. As of now, taking into context the trading on Wall Street and within the commodities, it cannot exactly be said that investors are putting forth a vote of confidence. The USD has gained substantially based on a decrease in risk appetite and the greenback remains well positioned. Equities have been struggling for most of the year and they show little signs of finding a crowd of long term buyers at this juncture. Commodities which maneuver within a demand & speculative environment have yet to prove that purchases are coming in greater frequency from producers and manufacturers. The ISM Non Manufacturing PMI reading yesterday, also showed that the American economy is projected to slip. While some feel that a true double dip recession is unlikely to come about, very few are now willing to say that a strong and sustainable recovery is around the corner. The USD is likely to trade in range today.
Written by bforex.com
