Forex News
- AUD/USD falls toward 0.6990 as stronger-than-expected US ISM Manufacturing PMI data boosts the US Dollar.
- US manufacturing activity strengthens in July, with the ISM Manufacturing PMI rising to 55.6 and New Orders climbing to 56.7.
- Focus shifts to Australia's final S&P Global Services and Composite PMIs and China's RatingDog Services PMI, seen easing to 53.7.
AUD/USD extends its pullback toward the 0.6990 area during Monday's American session after stronger-than-expected United States (US) manufacturing data reinforced the US Dollar (USD). The pair had rallied above 0.7050 at the start of trading this week but failed to sustain gains as investors reassessed the Federal Reserve (Fed) outlook following resilient economic activity.
The ISM Manufacturing Purchasing Managers Index (PMI) rose to 55.6 in July, beating market expectations of 54.0 and improving from 53.3 in June. Meanwhile, the New Orders Index increased to 56.7 from 56.0, pointing to solid demand across the manufacturing sector. The Prices Paid Index eased to 71.1 from 73.0, although it remained well above the 50 threshold, suggesting inflationary pressure continues to persist despite some moderation.
The stronger ISM figures prompted a rebound in US Treasury yields and supported the Greenback, weighing on risk-sensitive currencies such as the Australian Dollar (AUD). However, the softer reading in the Prices Paid component could temper expectations of an even more aggressive Fed stance if inflation continues to cool gradually.
Attention now turns to the Asia-Pacific session, where Australia will release the final S&P Global Services and Composite PMIs for July. Markets expect the Services index to be confirmed at 53.0 and the Composite gauge at 52.6, both unchanged from their prior readings and consistent with a modest but steady expansion in private-sector activity. An upside surprise on either measure could hand the Aussie renewed support by reinforcing confidence in domestic business conditions, while a downward revision would suggest momentum in the services sector is fading.
Traders will also keep a close eye on China's RatingDog Services PMI, the privately compiled survey covering Australia's largest trading partner. The index is forecast at 53.7 in July, easing from 54.1 in June but still holding comfortably above the 50 mark that separates expansion from contraction.
Short-term technical analysis:
On the 4-hour chart, AUD/USD trades at 0.6993, hovering just under the 20-period Simple Moving Average (SMA) at 0.6997 while holding above the 100-period SMA at 0.6984, which suggests a broadly neutral near-term tone with a slight downside risk. The horizontal support at 0.6985 aligns with the longer-term SMA, forming a nearby demand area, while the Relative Strength Index (RSI) around 47 hints at consolidative momentum rather than a clear trending phase.
On the topside, initial resistance emerges at the 20-period SMA near 0.6997, followed by the horizontal barriers at 0.6999, 0.7009 and the former opening level at 0.7018, which together define a gradual supply zone overhead. On the downside, immediate support is seen at 0.6985, with the 100-period SMA at 0.6984 reinforcing this floor; a sustained break beneath this cluster would open the door to a deeper pullback within the current range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang notes USD/SGD slipped to 1.2809 but closed near 1.2821, with intraday bias still pointing lower. However, he highlights 1.2790 as significant support that may hold unless momentum improves, while 1.2845 marks the level that would negate the downside bias. Over the 1–3 week horizon, further losses require a clear break below 1.2790.
Downside risk constrained by support
"24-HOUR VIEW: USD fell to a low of 1.2809 last Friday before closing largely unchanged at 1.2821 (+0.06%). While the bias remains tilted to the downside today, given that there is no clear increase in downward momentum, any decline may not break the significant support at 1.2790. On the upside, a breach of 1.2845 would indicate that the downside bias has faded."
"1-3 WEEKS VIEW: USD fell sharply last week, closing down by 0.67% at 1.2821. Strong momentum suggests further downside risk, but USD must break and hold below the significant support at 1.2790 before further declines are likely. The risk of USD breaking clearly below 1.2790 will remain intact as long as USD holds below 1.2875 (‘strong resistance’ level). Looking ahead, the next level to watch below 1.2790 is 1.2765."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Silver falls toward $57.20 after stronger-than-expected US ISM Manufacturing PMI data.
- Robust US manufacturing activity reinforces expectations of a hawkish Federal Reserve.
- Investors scale back easing expectations, weighing on precious metals.
Silver (XAG/USD) trades around $57.20 at the time of writing on Monday, down 0.73% on the day, after a strong US manufacturing report reinforced expectations that the Federal Reserve (Fed) will maintain a restrictive monetary policy.
The Institute for Supply Management (ISM) reported that its Manufacturing Purchasing Managers Index (PMI) rose to 55.6 in July from 53.3 in June, beating market expectations of 54. The release showed that US manufacturing activity accelerated at its fastest pace in more than four years.
The report's underlying components also pointed to a resilient manufacturing sector. The Employment Index climbed to 52.8 from 49.7, signaling a return to payroll growth, while the Prices Paid Index eased slightly to 71.1 from 73 but remained above the market forecast of 70.3, indicating that inflationary pressures remain elevated.
According to Susan Spence, Chair of the ISM Manufacturing Business Survey Committee, four of the five PMI sub-indices accelerated compared with June, confirming the strengthening momentum in the manufacturing sector.
The stronger economic data provide the Federal Reserve (Fed) with greater flexibility to tighten monetary policy further in its fight against inflation. Higher-for-longer interest rate expectations increase the opportunity cost of holding non-yielding assets such as Silver, limiting the metal's upside despite the recent support provided by easing geopolitical tensions in the Middle East.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- Gold struggles to hold its early advance on Monday as traders weigh conflicting US-Iran headlines.
- Hawkish Fed expectations continue to cap gains ahead of a packed US economic calendar.
- Momentum indicators suggest consolidation, with the RSI near neutral and the ADX pointing to weakening trend strength.
Gold (XAU/USD) trims gains after opening the week with a bullish gap as buyers lack conviction amid conflicting US-Iran headlines and caution ahead of key US employment data. At the time of writing, XAU/USD trades around $4,036, easing from an intraday high of $4,084.
US President Donald Trump said over the weekend that he had called off a planned strike on Iran, with negotiations expected to begin on Monday. The announcement lifted hopes of a peace deal and sent Oil prices sharply lower, with West Texas Intermediate (WTI) down more than 8% at the time of writing.
The pullback in Oil prices eases immediate inflation concerns and pulls US Treasury yields lower, offering support to Gold. However, supply disruptions through the Strait of Hormuz keep Oil prices above pre-war levels.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei also said Tehran is not currently holding talks with Washington, keeping traders sceptical about the chances of a deal and the full reopening of the Strait.
As a result, broader inflation concerns remain alive, and traders still see a high likelihood of the Fed raising interest rates this year. New York Fed President John Williams said on Monday that “rate policy is still well positioned to reach 2% inflation,” adding that “if inflation is not on track to 2%, the Fed will intervene to restore price stability.”
The CME FedWatch Tool shows that traders see a 65% chance of a rate hike in September. These hawkish bets continue to cap Gold’s upside despite broad weakness in the US Dollar (USD), driven by intervention from Japanese authorities to support the Yen.
On the US economic calendar, the ISM Manufacturing Purchasing Managers’ Index (PMI) is due later on Monday, followed by the JOLTS Job Openings report on Tuesday, ADP Employment Change on Wednesday and Nonfarm Payrolls (NFP) on Friday. The figures could offer fresh clues on the Fed's monetary policy outlook.
Technical analysis: Neutral RSI points to consolidation above $4,000
On the daily chart, XAU/USD maintains a capped tone as it trades below the 21-day Simple Moving Average (SMA) and well under the 50-day and 100-day SMAs.
This configuration suggests the broader trend is still under pressure, even as the Relative Strength Index (RSI) at 46 has recovered toward neutral and the Average Directional Index (ADX) at 27 hints at easing trend strength after the recent decline.
On the topside, immediate resistance is seen at the 21-day SMA near $4,065, followed by a more significant barrier at the 50-day SMA around $4,174, with the 100-day SMA at $4,416 reinforcing the broader bearish cap.
On the downside, initial support aligns with the horizontal level at $4,000, ahead of a deeper structural floor at $3,850, and a daily close below $4,000 would likely reopen the path toward the lower band of this support zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- EUR/USD trades in a narrow range as traders await clarity on US-Iran negotiations.
- Strong US manufacturing data and a stabilizing US Dollar cap the Euro’s upside.
- Upcoming US employment data could shape expectations for the Fed’s next policy move.
EUR/USD trades in a narrow range on Monday as traders await clarity on US-Iran negotiations, while signs of stabilization in the US Dollar following the recent intervention-led weakness cap the Euro’s upside.
At the time of writing, the pair trades around 1.1515 after reaching an intraday high of 1.1558, its highest level since June 17.
US President Donald Trump said over the weekend that he had called off a planned strike on Iran, with negotiations expected to begin on Monday. However, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said Tehran is not currently holding talks with Washington. The conflicting headlines keep geopolitical uncertainty alive and leave market sentiment cautious.
Traders also assess the latest business activity data from both sides of the Atlantic. The US ISM Manufacturing Purchasing Managers’ Index (PMI) rose to 55.6 in July from 53.3 in June, beating expectations of 54.0 and marking its highest reading since May 2022. The sector expanded for a seventh consecutive month following ten months of contraction.
Meanwhile, the Eurozone Manufacturing PMI improved to a three-month high of 51.9 from 51.4 in June, although it fell short of the market forecast of 52.0. The stronger-than-expected US reading offers some support to the US Dollar.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.84 after rebounding from an intraday low of 99.42, its weakest level since June 15.
Dollar outlook darkens as Fed caution and US-Japan action sap confidence
Economists at DBS argue that “the greenback’s trajectory looks bleak in August after stumbling badly at the end of July,” with a combination of policy and geopolitical factors leaving the Dollar exposed. They highlight “the confluence of a Fed seemingly reluctant to hike, coordinated US-Japan currency interventions, and a cooling geopolitical landscape in the Middle East” as key forces that “keep the USD vulnerable.”
DBS notes that “Fed Chairman Kevin Warsh has unsettled investors who had amassed long USD positions betting on his hawkish credentials.” Instead of signalling that rates may rise, “Warsh used the July 28-29 FOMC meeting to focus on institutional reforms, especially scaling back forward guidance.”
Attention now turns to upcoming US employment data for fresh clues on the Fed’s policy path. The JOLTS Job Openings report is due on Tuesday, followed by ADP Employment Change on Wednesday and Nonfarm Payrolls (NFP) on Friday.
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
Commerzbank’s Tatha Ghose analyses Turkey’s June trade figures, highlighting a 26.2% year-on-year widening of the trade deficit to USD 10.4 billion. While exports and imports both rebounded after May’s holiday distortions, imports are running stronger than exports. Ghose stresses that the trade deficit remains around 6% of GDP, underscoring persistent balance of payments vulnerabilities.
Deficit, imports and balance of payments
"Turkey’s latest trade data for June showed the external trade deficit widening by 26.2%y/y to USD 10.4bn. Exports rose by 21.7%y/y to US$24.9bn, while imports increased slightly faster, up by 23.0%y/y to US$35.3bn. On the surface, this appeared to confirm a strong month for trade, although at the cost of some worsening of the trade balance."
"But these headline figures are misleading. They partly reflect the reversal of holiday-related distortions in May, and the year-on-year comparison says little about the latest incremental trend. On a seasonally-adjusted basis, both exports and imports recovered after dipping in May (as the situation slightly stabilised in the Middle East). This means that the June data should not be read as a simple story of recovering trade volumes; if anything imports are running stronger than exports."
"The composition of imports gives the same message. Intermediate goods imports were up by 30.0%y/y and capital goods imports by 19.6%y/y, while consumer goods imports were lower by 1.2%y/y. This supports the idea of risk aversion, with consumer confidence deteriorating while industry wanted to stock up rapidly on raw materials."
"The data were not surprising, but they highlight the adverse condition of Turkey’s balance of payments despite years of attempted monetary tightening to try and correct macroeconomic imbalances such as the current-account gap."
"These monthly details aside, overall, it is not a comforting picture: as far as the trade deficit is concerned, it has been more or less flat at around 6% of GDP in recent months. The deficit has not been improving in any convincing underlying sense."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Geoff Yu at BNY sees Brazil and Mexico operating in a more comfortable policy environment after the Fed decision, with anchored United States (US) front-end yields supporting emerging-market duration. Yu argues that Latin American sovereign debt offers better risk-reward than FX, given crowded positioning and limited upside, while softer U.S. real rates and Dollar weakness improve the inflation outlook through the import channel for regional assets.
Duration opportunity in Latam markets
"Central bank decisions in Brazil and Mexico will likely take place in a slightly more comfortable policy environment due to market reaction to the Fed decision. Front-end US yields are better anchored, and the breakout in US breakeven rates have significantly undermined the case for US real yields, which matters greatly for EM duration."
"Asset selection remains challenging for the region. Contrary to our expectations, the global carry trade has failed to make much headway amid cross-asset volatility and challenging geopolitics."
"The fall in dollar front-end rates has improved risk-reward, but we see more potential in sovereign debt. Latin American paper performed poorly through end-June and early July, leading to clear rebalancing potential toward month end."
"With the decline in US real rates and dollar softness, the inflation outlook is set to improve further through the import channel, and the region is less exposed to global supply stress in any case."
"Lower hedge ratios than envisaged is a good way to pick up some FX exposure in the meantime."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Business activity in the US manufacturing sector expanded at an accelerating pace in July, with the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) rising to 55.6 from 53.3 in June. This reading came in better than the market expectation of 54.
Other details of the publication showed that the sector's payrolls grew in July, with the Employment Index climbing to 52.8 from 49.7. In this period, the Prices Paid Index, the survey's inflation component, edged lower to 71.1 from 73 but came in above the market forecast of 70.3.
Assessing the report's findings, “In July, US manufacturing activity remained in expansion territory, growing at its fastest rate in more than four years," noted Susan Spence, MBA, Chair of the Institute for Supply Management Manufacturing Business Survey Committee.
"Of the five subindexes that make up the PMI, four grew faster compared to the previous month; the exception was the Inventories Index, which was down just 0.2 percentage point," Spence added.
Market reaction to US ISM Manufacturing PMI data
The US Dollar (USD) Index edged slightly higher with the immediate reaction to the PMI report and was last seen trading flat on the day at 99.82.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.09% | -0.88% | -4.38% | -0.35% | 0.09% | -1.06% | -0.83% | |
| EUR | 1.09% | 0.20% | -3.32% | 0.75% | 1.20% | 0.04% | 0.25% | |
| GBP | 0.88% | -0.20% | -3.62% | 0.55% | 1.02% | -0.16% | 0.06% | |
| JPY | 4.38% | 3.32% | 3.62% | 4.18% | 4.65% | 3.45% | 3.60% | |
| CAD | 0.35% | -0.75% | -0.55% | -4.18% | 0.42% | -0.70% | -0.49% | |
| AUD | -0.09% | -1.20% | -1.02% | -4.65% | -0.42% | -1.15% | -0.93% | |
| NZD | 1.06% | -0.04% | 0.16% | -3.45% | 0.70% | 1.15% | 0.22% | |
| CHF | 0.83% | -0.25% | -0.06% | -3.60% | 0.49% | 0.93% | -0.22% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the US ISM Manufacturing PMI report for July.
- The US ISM Manufacturing PMI is seen improving to 54 in July from 53.3 in June.
- The ISM Prices Paid component is expected to have eased for the third consecutive month.
- The US Dollar trades at seven-week lows against the Euro, weighed by a positive risk sentiment.
Investors are attentive to the US Institute for Supply Management (ISM) on Monday, as it releases July’s Manufacturing Purchasing Managers Index (PMI). This is one of the most closely followed indicators of business activity in the US manufacturing sector, considered a key indicator for economic growth.
The market consensus anticipates an improvement to 54 in the headline indicator, from the 53.3 reading seen in June. If these figures are confirmed, they would match May’s reading, which was the strongest performance of the last four years, in an index showing expansion at levels above 50 and contraction otherwise.
Apart from that, the US ISM Prices Paid component is expected to have eased to 70.3, from 73 in June and 82.1 in May. This is the lowest inflation reading since the war between the US and Iran started, back in February, but still significantly above the 60 average in the six months preceding the war.
What to expect from the US ISM Manufacturing PMI report?
If the market consensus is met, it will confirm the resilience of the US manufacturing sector amid uncertainty surrounding the conflict in the Middle East and high energy prices stemming from it.
These figures are likely to revive the rhetoric of US economic exceptionalism and ease concerns about the slowdown of the second quarter’s US Gross Domestic Product (GDP) released last week. The market, however, will be very attentive to the Employment sub-index for a more complete view.
The US ISM Manufacturing Employment Index has been improving in the last two readings, but it has remained within contractionary levels for most of the last four years. In that sense, a strong PMI release, coupled with an expansion in employment and with inflation at relatively high levels, is likely to improve investors’ confidence about the US economy and strengthen the case for some Federal Reserve (Fed) monetary tightening this year, providing some support to the US Dollar.
The positive impact on the Greenback, however, is likely to be limited. The US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, is languishing at seven-week lows amid a mix of risk-appetite triggered by the pause in hostilities in Iran and the sharp USD/JPY reversal following an exceptional US-Japan coordinated FX intervention to shore up the Japanese Yen.
When will the US ISM Manufacturing PMI report be released, and how could it affect EUR/USD?
The US ISM Manufacturing PMI report is scheduled for release at 14:00 GMT on Monday.
The Euro (EUR) consolidates gains on Monday, trading at the 1.1525 area against the US Dollar at the time of writing, standing at its highest levels since mid-June. In that sense, positive data might put a lid on Euro appreciation, but it is unlikely to reverse the current bullish trend unless the risk mood changes substantially
The technical picture shows a modest bullish near-term bias, with the 4-hour Relative Strength Index (14) hovering around 64, showing a positive but not yet overbought momentum, while the Moving Average Convergence Divergence (MACD) indicator remains in positive territory.
Upside attempts have been capped at the 1.1550 area on Monday. Further up, the June 14 and 17 highs, around 1.1620, and the May 29 high, at 1.1685, are likely to test bulls. On the downside, previous resistance around 1.1475 (July 15, 16 highs) has now turned support. If that level gives up, the next targets are the July 29 lows around 1.1375 and the late June lows at 1.1325.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
ISM Manufacturing PMI
The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The indicator is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that factory activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Mon Aug 03, 2026 14:00
Frequency: Monthly
Consensus: 54
Previous: 53.3
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) provides a reliable outlook on the state of the US manufacturing sector. A reading above 50 suggests that the business activity expanded during the survey period and vice versa. PMIs are considered to be leading indicators and could signal a shift in the economic cycle. Stronger-than-expected prints usually have a positive impact on the USD. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are watched closely as they shine a light on the labour market and inflation.
Economic Indicator
ISM Manufacturing Prices Paid
The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector, taking into account expectations for future production, new orders, inventories, employment and deliveries. It is a significant indicator of the overall economic condition in US. The ISM Prices Paid represents business sentiment regarding future inflation. A high reading is seen as positive for the USD, while a low reading is seen as negative.
Read more.Next release: Mon Aug 03, 2026 14:00
Frequency: Monthly
Consensus: 70.3
Previous: 73
Source: Institute for Supply Management
DBS Group Research economist Ma Tieying notes Taiwan’s 2Q GDP growth slowed to 12.9% year-on-year from 14.5% in 1Q, but remained solid on a quarterly basis. The report highlights narrowing divergence between exports and domestic demand, upside risks to 2026–2027 growth forecasts, expectations for a central bank rate hike, and ongoing pressures in Taiwan’s equities, currency and bond markets.
GDP, rates and market pressures
"According to the preliminary estimate, GDP growth slowed to 12.9% yoy in 2Q, from the 1Q peak of 14.5%. On a QoQ saar basis, growth remained solid at 9.9%, compared with 6.9% in 1Q."
"As a result, net exports contributed 5.8ppt to headline GDP growth, while domestic demand contributed 7.1ppt. This marked the first time in five quarters that domestic demand made a larger contribution than net exports."
"We see some upside risks to our 2026 and 2027 GDP growth forecasts of 9.4% and 4.5%, respectively, although we are maintaining them for now. We continue to expect AI-driven super growth to transition toward a more normalized pace from 2H26 through 2027."
"The GDP data, both in terms of growth momentum and composition, should provide sufficient confidence for the central bank to hike rates in 2H26. CPI inflation is expected to remain in the 2-2.5% yoy range through 2H26, driven by a rebound in oil prices amid renewed Middle East tensions and volatile food prices under El Niño conditions. We continue to expect a 12.5bp rate hike in 4Q, bringing the policy discount rate to 2.125%."
"In financial markets, pressures from the stock market correction, capital outflows, and tighter liquidity conditions remain. The TAIEX has declined 10% from its late-June peak, driven by the global semiconductor stock sell-off and, in particular, heightened volatility in the KOSPI. Foreign net selling of the TAIEX reached USD23bn in July."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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