US Dollar Rises on an Improved Preliminary PMI for February
New York (Feb 20) The preliminary US Purchasing Managers’ Index for February beat expectations and sent the US Dollar more than 15 pips higher against the Yen in Forex markets.
The PMI was reported at 56.7, beating expectations for 53.6 and well above the 53.7 final index result for January. The output index was reported at 57.2 versus 53.5 in January, and the employment index rose from 53.2 to 54.0, according to Markit.
The better than expected PMI result forecasts a higher ISM index release for February and improved US economic performance in the coming months. Fed Chair Yellen said earlier this month that a change to the pace of the QE taper would only be prompted by a notable change in the economic outlook. Therefore, a better than expected survey for February might quell fears that the weak January data might cause the FOMC to consider a slowdown in the taper pace.
That’s why the US Dollar rose on the release of the PMI, and USD/JPY may next find resistance by the 2-week high set on Tuesday at 102.74.