US dollar is once again on the verge of a decline.
On Wednesday, the US Dollar (USD) fell versus most of its main peers as markets pushed it lower. The first changes came from German and European Purchasing Manager Indexes (PMIs), which showed improvement in practically all sectors (albeit they remained in contraction zone). A further drop in US PMI readings later this afternoon could result in a disaster for the dollar.
Traders are entering risk-on mode as German and EU PMI readings improve.
On the economic front, as previously said, US PMI statistics are scheduled to be announced this afternoon. The Manufacturing Number will be extremely noteworthy (it is anticipated to stay at 47.9). Given the present market movement, a further sell-off of the greenback could occur, causing the DXY to fall.
Daily market movers: US PMI on the docket
The German Purchase Manager Index statistics pushed the Euro higher versus the US dollar. German manufacturing increased to 45.4, up from 43.3.
French Manufacturing PMI was also an encouraging surprise, rising from 44.4 to 46.6.
The Mortgage Bankers Association’s US mortgage applications were reported earlier this week and came in at 3.7%, down from 10.4% the previous week.
Near 14:45 GMT. S&P Global is set to release the Purchase Manager Index for main sectors in the United States:
Manufacturing in January is predicted to remain stable at 47.9.
Services are predicted to reach 51.0 from 51.4.
The composite number was 50.9, with no expectations written in.
The US Treasury will release a 5-year note to the market around 18:00.
Equity markets are up amid good changes in the German and EU PMI data. All European indices are up more than 1%. In the United States, Netflix reported higher-than-expected subscription numbers, sending the Nasdaq jumping before of the opening bell.
According to the CME Group’s FedWatch Tool, markets are pricing in a 97.4% chance of an unchanged rate decision on January 31, with only a 2.6% chance of a decrease.
The benchmark 10-year US Treasury Note slides lower and flirts with a break below 4%, as risk is back in market.
