ISM Manufacturing PMI in contraction, but employment is positive – USD slides

Significant weakness in the US manufacturing sector: it is now in contraction, with a score of 48.6 points, below the 50 point threshold. Prices dropped to 35.5 points, worse than expected. New orders also dropped to contraction with 48.9 points. However, there is a silver lining: the employment component rose from 47.6 to 51.3 points, showing expansion. This is good news for the NFP on Friday.

The US dollar is weaker in the immediate aftermath, with EUR/USD testing resistance at 1.0630. This doesn’t go too far though.

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