US Recovery Gathers Momentum with Service Sector Expansion
The US Economic recovery seems to be gathering momentum moving into 2011 as service sector expansion reaches the fastest pace since May 2006.
The Institute for Supply Managementâ€™s non-manufacturing index, rose to 57.1 from 55 in November. A reading greater than 50 signals growth and the release substantially exceeds expectations. This index covers about 90 percent of the US and is a very good sign for the US economy.
Todayâ€™s ADP employment report from the US showed that companies boosted payrolls in December by the most since records began in 2001. The median forecast was for a 100k boost, the actual figure increased almost three times at 297k.
US Stocks have gained on the news, with the DOW up 0.26% and the S&P500 up 0.36%.. The currency market has seen widespread US Dollar strength with a move in cable down to 2011â€™s lowest support level at the 1.5450.
Currency strategists calling for Sterling strength in the tail end of last year are now not so sure with optimism being replaced by pessimism and forecasters now suggesting a move down towards the 1.45 mark could happen if the US economy continues to outperform the anaemic UK recovery.
A sharp retreat in commodity prices (particularly gold, copper and oil) have dramatically driven down the commodity driven currencies such as The Australian Dollar, The New Zealand Dollar and the South African Rand.
Markets eagerly await EU-16 retail sales for November tomorrow and Unemployment and GDP figures due on Friday. US Non-Farms will also headline on Friday with an expected figures of 128k.
Gold has fallen again today to the lowest levels in 3 weeks on speculation that a rapid US economic recovery will curb demand for metals as a safe haven.
Torfx Currency Dealer
â€œAny opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions
Currency Articles - Dec 2, 2015 11:35 - 0 Comments
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