Investing.com – Activity in the US manufacturing sector registered a larger-than-expected expansion to a 9-month high in July, according to preliminary data released on Friday.
In a report, market research group Markit said that its flash manufacturing purchasing managers’ index (PMI) rose to 52.9 in July from the prior month’s final reading of 51.3.
That was the highest level since October 2015.
Analysts had expected an increase to 51.6 this month.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
The report further indicated that new business volumes expanded at the fastest pace since October 2015, while showing the strongest increase in manufacturing payroll numbers for 12 months.
Markit chief economist Chris Williamson commented, “July saw manufacturers battle against a strong dollar, the ongoing energy sector downturn and political uncertainty ahead of the presidential election, yet still achieved the best growth seen since last year.”
Williamson was cautious about calling this the beginning of a stronger upturn, but still felt that data was encouraging after the second quarter showed the sector’s worst performance in over six years.
“In particular, an upturn in hiring which resulted in the strongest job growth for a year suggest companies are feeling brighter about the outlook and starting to expand capacity again,” Williamson concluded.
In an immediate reaction, EUR/USD was trading at 1.1016 from around 1.1019 ahead of the release of the data, GBP/USD was at 1.3088 from 1.3101 earlier, while USD/JPY was at 105.92, compared to the prior 105.97.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.13, compared to 97.10 ahead of the report.
Meanwhile, U.S. stocks were trading flat after the open as the Dow 30 slipped 2 points, or 0.01%, the S&P 500 edged forward less than a point, or 0.02% , and the tech-heavy NASDAQ Composite traded flat.
Elsewhere, in the commodities market, gold futures traded at $1,320.10 a troy ounce, compared to $1,323.35 ahead of the data, while crude oil traded at $44.37 a barrel from $44.56 earlier.