DXY Pulls Back Towards 96.00 As ISM Survey Highlights Easing Supply Chain Problems

  • The DXY fell back to near the 96.00 level following the latest US data, erasing early gains.
  • The latest ISM manufacturing report fell to 58.7 in December from 61.1 due to lower prices paid.

The DXY fell into negative territory that day in recent trading and is probing the 96.00 level following the latest batch of US data. The index, which is a weighted basket of trades of major USD currency pairs, is now trading around 0.15% lower on the day and around 0.4% lower than its previous peaks near 96.50.

Its latest dip saw it fall back south of its 21-day moving average, which is currently around the 96.20 level and bears will consider a test of last week’s lows in the 95.50 if the 96 level is reached. , 00 was broken. Support in the form of 50DMA at 95.65 is notable, the level of which has been associated with good buying interest in the recent past.

US data weighs on the DXY

The latest ISM manufacturing report fell to 58.7 in December from 61.1 in November, below the expected 60.0 and its lowest reading since January 2021. The drop was in part due to a drop prices paid sub-index, which fell to 68.2 from 82.4 in a sign of easing supply chain problems. This marked the index’s lowest reading since November 2020 and was the index’s steepest drop since March 2020. Elsewhere, new orders remained robust above 60.0 and the index l employment rose to 54.2 from 53.3, its highest reading since April, bodes well for Friday’s jobs report.

Meanwhile, the latest JOLT report for November showed a drop to 10.562 million job vacancies, from over 11 million in October. However, the report showed an increase in quits in high-end white-collar jobs, as well as in the hospitality industry, which, according to the famous Fed Observer and Chief U.S. Economist at SGH Macro, was consistent with increasing wage pressure at the top level. ends of the employment spectrum.

The lack of a title in the JOLT report coupled with the deflationary signal encapsulated by the sharp drop in prices paid ISM sub-index seem to have been enough to weigh on the intra-day DXY. This may be because traders may interpret the data to indicate that the US labor market is not as hot as it is thought and that inflation may come down sooner rather than later as the chain issues. supply easing, combining to put less pressure on the Fed to tighten monetary policy. as fast.

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