THE TAKEAWAY: [U.S. manufacturing expands at slowest pace in 18 months] > [Weaker export orders on deteriorating demand from overseas markets] > [USDJPY mixed]
Manufacturing activity in the U.S. expanded in June at its slowest pace in 18 months, as weaker economic conditions overseas weighed on demand for U.S. exports. A report released by the London-based Markit group showed that its Markit Economics index of U.S. manufacturing fell to 52.5 in June from 54.0 in May. A reading above 50 in the purchasing managers’ measure indicates expansion. Economists surveyed by Bloomberg News had expected the final reading for June to remain unchanged from its initial reading of 52.9. Total new orders rose at the slowest pace in four months, as new export orders declined from May, reflecting deteriorating demand in many overseas markets including the euro zone and China.
The Institute for Supply Management (ISM), which will publish its own manufacturing survey later this morning, has shown expansion in the sector for 33 straight months. Economists surveyed by Bloomberg News expect further growth in June based on the ISM manufacturing index, albeit at the slowest pace in eight months.
USDJPY 1-minute Chart: July 2, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
In the minutes after data release, movements in the U.S. dollar were mixed though muted overall. At the time of this report, the greenback was trading slightly higher against the Japanese yen at 79.73 yen.
--- Written by Tzu-Wen Chen, DailyFX Research
- Bloomberg News