The pound to US dollar interbank exchange rate moved somewhat higher this week, in part because the world’s money managers are waiting to see the EU’s official response to PM Johnson’s formal revised Brexit plans.
Meanwhile, in the United States, America’s economy showed surprising signs of weakness this week, while the House of Representatives’ impeachment process against President Trump continues.
To start with, according to ISM’s US manufacturing PMI this Tuesday 1st October, the United States’ factory output fell to 47.8 in September, below forecasts for 50.1 and the weakest figure in over a decade. In particular, ISM’s survey of US factory exports dropped to just 41.0, well into contraction territory.
This suggests that America’s and China’s trade war is beginning to undermine the USA’s manufacturing sector. According to ISM’s Chair Timothy Fiore, “Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019.
Overall, sentiment this month remains cautious regarding near-term growth.” With the trade war most likely affecting US manufacturing, if this was to continue this could have a detrimental effect on the US dollar.
Elsewhere, ADP’s monthly survey of US job creation reached just 135,000 new roles in September, according to fresh data released this Wednesday 2nd October. This was below the financial markets’ forecasts for 140,000 new positions, August’s figure of 157,000, as well as closer to the 100,000 new monthly positions needed to keep pace with America’s population growth.
This bodes ill, ahead of the US Department of Labour’s highly-anticipated Non-Farm Payrolls, released later today. Meanwhile, ISM’s September poll of New York business conditions eased to 42.8, well below August’s 50.3, said new statistics this Wednesday.
The House of Representatives’ impeaching proceedings against President Trump are accelerating this week. The House, led by the Democrat’s Nancy Pelosi, is attempting to impeach President Trump, following allegations that the USA’s Commander-In-Chief pressured Ukraine’s President, Volodymyr Zelensky, to dig up dirt on President Trump’s Democratic rival, Joe Biden, and his son.
This week, the House began to collate evidence and witnesses pertaining to President Trump’s conversation with President Zelensky. However, Mrs. Pelosi faces strong resistance from the White House, including Secretary of State Mike Pompeo. The impeachment proceedings could further affect the US dollar, looking ahead.
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