US Dollar Outlook:
- The preliminary November US Markit Manufacturing PMI met expectations, halting what had been a three month slide in the index.
- However, the other two PMI readings released – Services and Composite – came in below expectations, signaling that the US economy’s robust growth trajectory may have slowed in November.
- According to the IG Client Sentiment Index, the major USD-pairs collectively have a mixed bias ahead of the Thanksgiving holiday.
US Growth Proxies Mostly Weaker
The US Dollar (via the DXY Index) is taking a breather this morning after the release of the preliminary November US Markit PMI reports. While the gauge of manufacturing activity met expectations, reversing a three month decline, the two more important readings – the services and composite – both slipped, suggesting that US economic activity may have slowed in November from its previous breakneck pace. Coming into this week, the Atlanta Fed’s GDPNow 4Q’21 growth tracker pegged real annualized GDP at +8.2%.
Here are the data driving the US Dollar this morning:
- USD Markit US Manufacturing PMI (NOV P): 59.1 as expected, from 58.4
- USD Markit US Services PMI (NOV P): 57.0 versus 59.0 expected, from 58.7
- USD Markit US Composite PMI (NOV P): 56.5 from 57.6
See the DailyFX Economic Calendar for Tuesday, November 23, 2019.
DXY INDEX TECHNICAL ANALYSIS: 5-MINUTE PRICE CHART (November 23, 2021) (CHART 1)
Following the PMI reports, the US Dollar’s brief rally on the session was halted, with pairs like EUR/USD and GBP/USD rallying around the news. The moves were minor, however, with the DXY Index falling back from 96.55 to 96.48 at the time this report was written. The US Dollar remains broadly elevated so far this week, however, having clocked in significant gains to fresh yearly highs around the news that Fed Chair Jerome Powell would be nominated for a second term.
— Written by Christopher Vecchio, CFA, Senior Strategist
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