US Manufacturing Expands, Dollar Profits

The US dollar advanced today as the unexpected growth of US manufacturing spurred speculation the Federal Reserve won’t be required to stimulate the economy, debasing the US currency. The Institute for Supply Management Purchasing Managers’ Index was at 56.6 in August, little changed from July figure of 56.9. The index was expected to go down to 48.7. A figure below 50.0 indicates decline and above that value shows expansion. The positive data suggest that, perhaps, the economy on the US isn’t in a bad enough state to warrant new round of quantitative easing. Unemployment claims edged down from 421,000 to 409,000 last week, reducing concerns about employment to some degree. Other major reason for concerns of the Fed, the housing market, performed markedly worse as constructions spending hasn’t increased 0.2 percent, as was promised by forecasts, but slumped 1.3 percent. EUR/USD opened at 1.4374 and dropped to 1.4226 before trading near 1.4259 as of 22:57 GMT today. GBP/USD fell from 1.6249 to 1.6183, while reached the intraday low of 1.6130 earlier. USD/JPY advanced from 76.64 to 76.86 and earlier touched the high of 77.24.