US Manufacturing PMI 49.7; Closer to Expansion Territory

The US Manufacturing PMI came in at 49.7 for November, beating expectations of 48.8 and edging closer to the 50 mark indicating expansion. That is higher than the reading of 48.5 for October, suggesting perhaps a recovery trend in the manufacturing sector despite remaining in contraction territory.

Therefore, this surprise increase of PMI acts as a bullish indicator for the US dollar due to better-than-expected performance shown in the manufacturing industry. Being one of the first few leading indicators, the PMI only reflects the optimism of the purchasing managers as reporting early on the performance of the company and the economy.

Given the uptrend in hand, investors and traders in all probability would be tracking this keenly, as this may suggest wider economic recoveries. The sector is still in contraction, yet the nearing of the PMI towards the expansion territory may boost market sentiment and strengthen the US dollar in the near term.