Global Themes

Greenback hits a speed bump as manufacturing tanks

The US dollar index – a key measure of USD strength – fell sharply from two-year highs overnight after a big drop in manufacturing activity sparked fears that the US-China trade war was starting to pressure the US economy.

The US manufacturing PMI numbers saw a big drop from 53.0 to 50.9 over the month and defied expectations for a small increase.

The numbers mirror poor results across the globe overnight with manufacturing PMI numbers in Germany and Japan also hitting markets.


The USD dollar weakness saw the USDSGD fall from recent highs.

The Aussie was weaker with the manufacturing worries seeing the AUD lower.

The British pound fell on worries about the potential resignation of the UK prime minister Theresa May.

EU election

The weekend’s focus will be on the EU elections.

The elections can have a larger-than-usual effect this time with the EUR climbing from the recent lows and the GBP recently falling.

What’s the potential risks?

For EUR, a good result for the traditional major parties (rather than disruptive minor parties) could boost the EUR.

In the GBP, a strong showing for the Brexit and independent parties could weaken the British pound and push the GBP back to four-month lows.

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