U.S. ISM manufacturing index falls in February

The U.S.ISM manufacturing index dropped 2.4 percentage points to 54.2 in February. Market expectations were for a comparatively flat reading. Apart from inventories, four of the five subcomponents that comprise the headline index dropped in February. However, activity continues to grow, just at a slower rate. Production led the way lower, wiping out much of January’s gain. Employment, new orders and supplier deliveries round out the remaining subcomponents.

The trade components of the report strengthened slightly in February. However, both the moves in new export orders, and import orders were not material enough to imply a reversal of the downtrend that is been ongoing since U.S. imposed steel and aluminium tariffs last March, noted TD Economics in a research report.

Prices paid remained stable in February, maintaining January’s pullback. Reduced price pressures continue to reflect falls in the price of aluminium and steel products, and crude oil/gas. Out of 18 manufacturing industries, 16 recorded growth in February, up from 14 in the prior month. For the second straight month, just the non-metallic mineral products industry saw a contraction.

U.S. manufacturing activity continues to be in an expansion mode, unlike several of its global peers. However, today’s report implies that a return to the same high pace of growth achieved through the first half of 2018 is unlikely. Survey respondents are positive about the domestic outlook; however, they are less confident regarding foreign demand.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 146.345 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex