The influential Institute for Supply Management’s factory index report is set to be issued tomorrow, 1 August, 2013. The report details levels of growth for the month of July in the manufacturing sectors of the US.
Analysts believe that the ISM’s report is likely to show continued improvement as the report that was released on 1 July 2013 brought US manufacturing during the month of May into the black in terms of positive growth.
Many observers are hoping that a strong ISM report may help to boost the falling dollar which has suffered against many of its rival currencies in recent weeks. Additionally, there is speculation that positive manufacturing data may help to influence the Federal Reserve to reduce its quantitative easing program.
Traders are advised to proceed on the USD with caution, despite the positive outlook that is expected from this report..
British and Eurozone Rate Decisions
The central banks for both the UK and the Eurozone are slated to release their individual rate decisions tomorrow 1 August 2013. At this time, most experts believe that both financial institutions will likely maintain their current matching rates for the coming month. Analysts remind readers of the significance of the interest rate decisions as they concern the desirability of their currencies in the market, thus affecting their value in trading.
Analysts believe that while the UK has shown increased signs of recovery, the Eurozone continues to struggle regain stability. As such, neither central bank would appear to be in a rush to play with the interest rates at this crucial time.
Traders are advised to proceed with caution in trading for both the GBP and the Euro at this time.
Dollar Hit in Leap Up to FOMC Meeting
It was reported on 31 July 2013 that the US dollar was nearing the depths of a month-long low in its trading against rival currencies. Having lost a significant percentage of its value over this time period, analysts point to uncertainty regarding the next move of the Federal Open Market Committee of the US Federal Reserve which is set to begin its meetings today.
Part of the concern for the US dollar can be based on the belief by many experts that there has been slowed GDP growth over the past three months along with a cut to the number of jobs added in June.
Analysts remind readers that Federal Reserve Chairman Ben Bernake has consistently remarked that any cuts to the $85 billion bond buying program would be dependent on measures of growth, placing special emphasis on the the jobs numbers, thus further concerning investors over the near term future of the USD.
Traders are advised to proceed on the USD with caution.