2023-07-03 20:38:38
The dollar ended flat on Monday following the release of a disappointing indicator in the United States, following rising modestly, with other data in Europe and China pointing to sluggish global growth.
Around 8:00 p.m. GMT, the greenback gained 0.01% compared to Friday evening, at 1.0910 dollars for one euro and lost 0.10% once morest the pound at 1.2690 dollars.
The activity of the American manufacturing industry contracted once more in June, for the eighth month in a row, reversing market expectations, according to data published Monday by the professional federation ISM.
The index measuring this activity fell in June to 46%, once morest 46.9% a month earlier, while analysts were rather expecting a slight increase to 47.1%.
This is the eighth month in a row below the 50% mark, which means that activity remains in contraction.
Up 0.21% before the release of the US manufacturing activity barometer, “the dollar then fell with the ISM indicator which suggests that activity has bottomed out”, commented Edward Moya of Oanda who pointed out that the invoice price sub-index was down significantly.
In China, manufacturing activity continued to decline in June, to 50.5 points, once morest 50.9 points in May, according to the purchasing managers’ activity index (PMI) published by the media group Caixin and S&P Global.
An index above 50 is evidence of growing activity while below this threshold, a contraction is observed.
“A demand at half mast, at the local level but especially at the international level, weighs on the Chinese PMI”, notes Duncan Wrigley, analyst at Pantheon Macroeconomics.
However, the weakness of Chinese economic activity did not prevent the yuan from registering a slight increase of 0.10% to 7.2468 yuan for the dollar.
Exchanges in yuan are strictly regulated by the authorities, who “set high levels at the range they tolerate in June”, recalls Carol Kong, analyst at Commonwealth Bank of Australia.
The pound also suffered from the contraction of PMIs published on the Old Continent on Monday, particularly in the United Kingdom (manufacturing PMI of 46.5 points).
Finally, the Swiss franc lost 0.10% to 0.8965 Swiss francs per dollar and 0.11% to 0.9780 Swiss francs per euro.
Swiss inflation fell to 1.7% year on year in June, below the central bank’s target of 2%.
“The data points in the right direction and once morest the idea that the central bank will have to raise its rates once more,” judge James Harte, analyst at TickMill.
The prospect of higher rates makes a currency more attractive.
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