Dollar Down After Slide in Manufacturing Survey

The Dollar weakened on Monday after ISM Manufacturing PMI data fell substantially lower even though it did not decline below market expectations.

The Dollar Index, which measures the performance of the Dollar against a basket of currencies fell to 100.32 after the release, from 100.47 before.

GBP/USD rose marginally from 1.2504 to 1.2508 following the release.

ISM Manufacturing PMI is a survey of Purchasing Managers within the Manufacturing sector and measures their views on a variety of key metrics.

The ISM survey in March fell to 57.2 from 57.7 when a deeper decline to 57.0 had been forecast.

Regardless of expectations, the Dollar was sold as the ISM fell from the previous month.

“Donald Trump placed manufacturing at the heart of his successful run for the White House, so today’s slight retreat from the three-year high PMI reading recorded for February is likely to cause some jitters.

“It is not quite panic stations for Trump, and the manufacturing sector is still broadly performing well. But the two executive orders he signed on Friday that were designed to strengthen industry have already been roundly criticised as ineffective, and the pressure to start delivering on campaign promises is rising,” commented Dennis De Jong, Managing Director of UFX.com.

Of the subcomponents of the ISM, some metrics performed better than others.

The ISM Manufacturing Employment sub-index, for example, actually showed a surge higher to 58.9 from 54.2 in March, when analysts’ consensus forecasts had been for a much more gradual recovery.

New Orders, however, which is an excellent forward looking indicator for the sector, fell by -0.6 from 65.1 to 64.5 in March.