The Institute for Supply Management`s factory index report is expected to be released today.The report will detail the growth in American production for the month of December 2013. At this time, many experts believe that while the report will still show positive growth, there may be a slight reduction from the pace of growth from the previous month of November 2013.
Analysts remind readers that the ISM report is a significant economic indicator in that it helps to provide an insight into the level of American productivity. Moreover, along with reports like the Non-Farm Payrolls and the CPI reports, it helps experts map trends in the economy.
Analysts note that the increased growth that has been experienced in recent months, helping to bolster the economy has been pushed along with the expansion of the manufacturing sector. As manufacturing grows, more jobs are created and more currency is streamed into the economy.
Traders should look for a continued rise in the value of the US dollar following the release of this report.
Euro Struggles at End of 2013
The euro is said to have faced difficulties from multiple fronts in trading according to reports on 31 December 2013. It was beaten out by nearly all of the 16 major rival currencies on which it is commonly traded. Perhaps the two most significant losses were made against the US dollar and the British pound.
Analysts note that the decision to make cuts on the quantitative easing measures by the Federal Reserve during mid-December 2013 was instrumental in helping to boost the value of the dollar in its trading. This change in monetary policy along with a string of positive reports on jobs and production have helped to make the dollar more attractive to investors. For its part, the pound has been on the rise due to improved housing prices and growth in that sector.
Analyst believe that the euro will continue to be under some pressure through the first few weeks of the new year. Traders are advised to approach trading in euro based assets with caution.
God Gains as Traders Hedge Bets
It was reported on 2 January 2014 that precious metals gold and silver were enjoying a reprieve at the start of the new year following heavy losses during 2013. The reports indicated that investors were off put by the significant losses, perhaps predicting that the market would look to even itself out back to a middle ground.
Readers are reminded that during 2013, gold suffered its largest annual loss since 1981. The drop in value stemmed from a rebound in the US dollar and the decision by the Federal Reserve to reduce its $85 billion stimulus package down to $75 billion. As confidence in the American economy has risen, investors see far less reason to look to haven assets such as gold, and gold backed products.
Perhaps what has helped to keep gold from completely dropping off has been demand out of Asia, with China and India continuing to purchase gold for immediate delivery. That said, with many of the largest investors stating in recent months that they intend to step away from their gold holdings in the near future, analysts believe that the next few months may be rocky for the precious metal.
Traders are advised to look for continued volatility in trading gold as the market attempts to find an equilibrium.