EUR/USD Bounces as ISM Manufacturing PMI Misses Expectations

EUR/USD was gradually moving lower during the Thursday’s trading session but rebounded sharply after the manufacturing index released by Institute for Supply Management failed to meet market expectations and surprised economists by falling into the contraction territory. Construction spending missed forecasts as well, adding pressure on the US currency.
Initial jobless claims were at the seasonally adjusted level of 263k last week. That is compared to the previous week’s value of 261k and the predicted figure of 265k. (Event A on the chart.)
Revised nonfarm productivity fell 0.6% in Q2 2016, matching expectations exactly, after decreasing at the same rate in Q1. The preliminary reading showed a bit smaller drop by 0.5%. (Event A on the chart.)
Final Markit manufacturing PMI fell from 52.9 in July to 52.0 in August. It was almost the same as the preliminary reading of 52.1 and in line with analysts’ forecasts. (Event B on the chart.)
ISM manufacturing PMI slumped to 49.4% in August from the July reading of 52.6%, far below the forecast figure of 52.0%. The indicator was also below the neutral level of 50.0, meaning that now it shows contraction of the sector. (Event C on the chart.)
Construction spending showed zero change in July from the previous month whereas market participants were counting on an increase by 0.6%. The previous month’s reading got a huge positive revision from -0.6% to +0.9%. (Event C on the chart.)

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