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USD/JPY Hits Session Low as ISM Manufacturing Misses Forecast
2021-05-03 14:45:00
Rich Dvorak,
Analyst
USD/JPY PRICE OUTLOOK: US DOLLAR EXTENDS PULLBACK ON ISM MANUFACTURING PMI MISS
US Dollar under pressure as Monday’s trading session gets underway
USD/JPY price action sliding to daily lows following softer PMI data
ISM manufacturing was reported at 60.7 versus the 65.0 forecast
The US Dollar is hitting new session lows right now in the wake of disappointing PMI data just released by the Institute of Supply Management. USD/JPY currently trades 34-pips lower intraday with the move to the downside nearly erasing last Friday’s sharp rise. According to the DailyFX Economic Calendar, the ISM manufacturing PMI crossed market wires with a reading of 60.7, which was below the 65.0 forecast. The weaker-than-expected PMI report also reflects a deceleration in manufacturing activity from last month’s print of 64.7, but the sector continues to expand nonetheless.
Will dollar extend gains?
Further strength in the greenback is possible this week
The Dollar Index continued to trade weak almost all through last week. The index fell to a low of 90.42 but made a sharp recovery in the US session on Friday. Euro rose above 1.21 after the US Federal Reserve meeting on Wednesday. However, it failed to sustain higher and tumbled below 1.21 on Friday to close on a weak note at 1.2021. The US Federal Reserve meeting last week became largely a non-event as the central bank made no change in its stance.
Fed on hold
As expected, the US Federal Reserve last week left the market with no surprise. The Fed kept the interest rates and its stimulus programme unchanged. The US Federal Fund rate is currently at 0 -0.25 per cent. The central bank also reiterated to support the economy with the stimulus as long as needed. Currently the Fed’s stimulus asset purchase is of the quantum of $120 billion per month. The outcome of the Fed meeting had no impact on equit
Author Bio
James Brumley is former stockbroker with a large Wall Street firm, and a former trading analyst for a small, options-based newsletter. After twenty years of professional experience in and around the market, his approach is one that combines fundamentals, sentiment, and common sense. It s also an approach that respects this John Keynes reality: The market isn t always rational. Follow @jbrumley
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