SHANGHAI, Sept. 6 (SMM) –The US dollar index fell sharply yesterday after speech by US Fed official Brainard and poor US economic data.
Caixin’s China service PMI hit a 3-month high of 52.7 in August. New business index, employment index, input price index and business expectations index all rose, while consumer price index fell to below 50. Positive service and manufacturing PMI suggest economy remained positive in August. But, it remains to be seen whether the growth will sustain. Chinese economy is expected to see high growth in H1 2017 and stable growth in H2.
Euro zone retail sales fell 0.3% in July, in line with forecast and the biggest decline since last March. Eurostat said textile, garment and shoe industries are the only industries that register higher sales. Sales in Germany fell faster than other members of the euro zone. Lower sales suggest stimulus by ECB has yet to translate into faster inflation and wage growth. Euro dropped against US dollar after the data.
US durable goods orders fell 6.8% in July, below forecast. US factory orders fell 3.3% in July, the biggest fall in nearly 3 years. Poor durable goods orders indicate manufacturing activity will face downward pressure soon and will reduce possibility of rate hike later this year. US dollar index fell faster after the figure.
US Fed official Brainard said US Fed should keep cautious about rate hike at current low inflation and should wait until inflation has good chance to reach target. Brainard added that US economic foundation is solid, investment is picking up and market is anticipating balance sheet reduction. Harvey will affect Q3 GDP, Brainard pointed out. US dollar index dropped after his remarks.
See SMM price forecast, please click: SMM Price Outlook for Base Metals on SHFE (Sept. 6, 2017)
