By CountingPips.com
U.S. Manufacturing data, released today by the Institute for Supply Management, showed that manufacturing activity increased in August for the first time in nineteen months. August’s ISM Report On Business index readings for economic activity registered a 52.9
percent score following July’s 48.9 percent level and marked the first time since June 2007 the score has surpassed a 50 percent reading. A score above 50 percent is considered to be economic growth and less than 50 percent is considered to be a contraction. The August score was better than economic forecasts which were expecting the ISM index reading to register 50.5 percent for the month.
Norbert J. Ore, chair of the ISM Business Survey Committee, commented on the report saying, “The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July. While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth.”
Pending Homes Sales in US increase.
U.S. Pending Homes sales rose for the sixth straight month in July according to the monthly report produced by the National Association of Realtors. The NAR report showed that pending home sales contracts signed by buyers increased 3.2 percent in July following a 3.6 percent increase in June. July marked the first time since the beginning of the NAR index in 2001 that pending home sales have increased for six consecutive months. On an annual basis, the pending home sales level has increased to 12.9 percent above the July 2008 level.
Market forecasters had predicted the sales data would show an increase of approximately 1.5 percent for the month.
NAR chief economist Lawrence Yun commented in the report about the increased sales figures this month, “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit.”
Contributing to the sales rise for June was a 12.1 percent monthly gain in the West while sales of new homes in the South advanced by 3.1 percent. Pending home sales fell by 3.0 percent in the Northeast and by 2.0 percent in the Midwest.
US Dollar gains in Forex Trading today.
The U.S. dollar has traded sharply higher in forex trading today against the major currencies after mostly losing ground in yesterday’s trading. The dollar has gained ground versus the euro, British pound, Canadian dollar, Swiss franc, Australian dollar and the New Zealand dollar while the dollar has edged lower versus the Japanese yen according to currency data from Oanda at 2:07pm EDT in the US trading session.
EUR/USD Chart – The Euro falling sharply today versus the US Dollar and threatening to fall below the 1.4200 level (hourly chart). The EUR/USD has fallen approximately 150 pips today after gaining in yesterday’s trade.
