The US Dollar has strengthened against the majority of its peers after new data out of the world’s largest economy showed that manufacturing grew at its slowest pace in six months as demand from customers declined, raising fears that American recovery is stalling.
According to Markit, its preliminary Purchasing Managers Index (PMI) fell to 52.0 in April from the 54.6 figure posted in March. It is the lowest reading since October 2012. Output fell to 53.6 from 56.6, the weakest growth rate since last November and domestic demand increased at its slowest pace in six months, with new orders coming in at 51.8 in April, down from the 55.4 figure recorded last month.
Cheif Markit economist Chris Williamson said; “The data raises concerns that the manufacturing expansion is losing momentum rapidly as business and households worry about the impact of tax hikes and government spending cuts. The results suggest that output growth slowed from an annual pace of nearly 8% earlier this year to 2% at the start of the second quarter.”
Data measuring the number of new home sales in the US came in lower than economists expected but was an improvement from the -7.6% decline seen in the previous month. Overall new home sales improved rising to 417k compared to economist predictions of 416k.
The next piece of key data for the US Dollar will be Fridays preliminary GDP data which is likely to show that the economy expanded by 3% in the first quarter. If accurate then the Dollar could weaken as demand for riskier assets would increase.
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