USD consolidates after Friday’s losses; China reports softer manufacturing data

Chinese manufacturing PMI turned out to be lower than expected in July, the actual reading of 51.4 was lower than the previous month’s reading of 51.7 and also came short of an expected 51.6. Overall sentiment during Asian trading remained rather mixed and seemingly awaiting better direction.

The Aussie suffered some losses given its close trading ties with the world’s second largest economy, and the softer results registered overnight.

The US Dollar’s performance so far this week is close to neutral after consolidating from Friday’s losses. Friday’s softer-than-expected annualized US GDP for the second quarter did not help support for the USD.Q2 annualized GDP came out at 2.6% disappointing expectations of 2.7%.

In the meantime geo-political tensions with North Korea remain in the background and will likley continue to taint overall sentiment.

Later this morning EZ CPI estimate will likely get some attention given the tight link inflation has with monetary policy. Next Tuesday proves to be quite busy as we have RBA rate decision, German Unemployment, EZ GDP, US PCE and US ISM manufacturing. On Thursday BoE anounces its rate decision and the US its ISM non-manufacturing composite. On Friday we are expecting Canadian employment change and US unemployemnt rate.

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