The euro (EUR) steadied against the US dollar (USD) on Monday, following a slight dip in the dollar after disappointing US manufacturing figures. Currently, the EUR/USD exchange rate is about 1.1525, bouncing back from an intraday low of 1.1505, yet lingering close to its lowest point since early August.
According to data from the Institute for Supply Management (ISM), U.S. factory activity has contracted for the eighth month in a row in October, with the Manufacturing Purchasing Managers Index (PMI) dropping to 48.7 from 49.1 in September, falling short of expectations which were set at 49.5.
The sub-indices presented a mixed picture: new orders saw a slight rise to 49.4, while production plummeted to 48.2. Employment figures ticked up slightly to 46. Additionally, the price paid index dropped to 58, suggesting a slowdown in cost growth. ISM Chairman Timothy Fiore commented that “U.S. manufacturing activity contracted at a faster pace,” with reductions in production and inventory driving this decline. He also noted that temporary increases in demand indicators haven’t yet led to sustained growth.
Complementing the ISM report, the S&P Global U.S. Manufacturing PMI for October rose to 52.5 from 52 in September, marking the third consecutive month of expansion. Chief Business Economist Chris Williamson observed that while domestic demand is holding up, there are concerns about “surging inventories and remaining price pressures,” raising questions about how sustainable the recent growth really is.
The U.S. Dollar Index (DXY), which tracks the dollar’s strength against a basket of six major currencies, remains around 99.81, backed by the Federal Reserve’s cautious approach following last week’s 25 basis point interest rate cut. Chairman Jerome Powell emphasized that further easing this year is “not a foregone conclusion.”
Earlier in the day, it was confirmed that the HCOB Eurozone Manufacturing PMI for October matched expectations at 50, slightly up from September’s 49.8. This indicates that new orders are relatively stable, while production is increasing modestly, suggesting that factory activity is stabilizing after a brief slowdown last month.
