US Dollar Holds Ground Despite Mixed S&P PMIs; Fed Insights Awaited
Although service sector growth cooled slightly, manufacturing staged a welcome return to growth, with factory output growing at the fastest rate for ten months.
2/24/20241 min read
US Dollar Holds Ground Despite Mixed S&P PMIs; Fed Insights Awaited
The US dollar stands its ground following a mixed bag of S&P PMI data, which revealed a slowdown in the service sector but an uptick in manufacturing activity for February. According to S&P Global, US companies reported continued expansion, albeit at a slower pace, with marginal output growth in services tempered by a stronger rebound in manufacturing production, aided by improved supply chains post adverse weather conditions in January.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, remarked, "The early PMI data for February indicate that the US economy continued to expand midway through the first quarter, pointing to annualized GDP growth in the region of 2%. Although service sector growth cooled slightly, manufacturing staged a welcome return to growth, with factory output growing at the fastest rate for ten months."
As the US session progresses, market focus turns to insights from Federal speakers Jefferson, Harker, Cook, and Kashkari, who will offer their perspectives on the state of the US economy following the cautious tone of last night's FOMC minutes.
US Dollar Recovers Ground Post Fed Minutes, Caution on Rate Cuts
Starting the European session around the 103.50 mark, the US dollar has strengthened throughout the day, with the US dollar index (DXY) now hovering around 104.10. Attempting to break a recent downward trend from last week's high of 105.02, the dollar shows signs of resilience. Market sentiment continues to factor in expectations of three to four 25 basis point rate cuts this year, with the first anticipated cut slated for the June 12th FOMC meeting.