U.S. ISM manufacturing index rises above expectations in February

The ISM index of manufacturing for February rose 1.7 points to 60.8, coming in above market expectations of a slight decline to 58.7. This is the 18th consecutive month that the index has been in expansion territory.

The underlying details of the report came in mixed, with the headline index driven by a solid growth in employment, inventories, and supplier deliveries. Although both production and new orders fell, they still remain near cycle highs that were reached at the end of last year. Prices paid rose 1.5 points to 74.2, also a new cycle high. The spread between new orders and inventories narrowed to 7.5 in February. In all, the indicator remains in line with manufacturing activity continuing to grow through the first quarter of 2018.

The U.S. manufacturing sector continues to surprise to the upside, as demand for U.S. manufactured goods remains strong. Furthermore, comments by survey participants were positive, implying that demand is being underpinned by tax cuts, and that capacity pressures, exchange rate volatility, and component shortages are pushing up input prices.

Along with solid domestic demand come encouraging signs of strong foreign demand. New export orders rose sharply to a cycle-high, and PMI manufacturing surveys recorded this morning imply that global demand for manufactured goods remains solid in several parts of the world. This augurs well for first quarter global trade volumes and economic activity more broadly, stated TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 107.839. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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