“The dollar will not be making much further headway before Friday’s non-farm employment report”, said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo.
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Coming a week after the USA posted sluggish second-quarter growth, the uninspiring manufacturing surveys may give Federal Reserve Chair Janet Yellen pause before a Fed meeting on September 20-21 to decide whether to raise interest rates. Hong Kong’s Hang Seng index gained 0.8 percent to 23,161.91.
KEEPING SCORE: Britain’s FTSE 100 was up 0.2 percent at 6,793 and Germany’s DAX rose 0.5 percent to 10,642. The yield on 10-year United Kingdom gilts climbed 6 basis points to 0.597%. The Dow Jones industrial average fell 53.42 points, or 0.3 percent, to 18,400.88.
The pound also soared against the Euro, hitting 1.19 Euro to the pound.
In contrast, public construction fell 3.1% to its lowest level in more than a year, due to an 8.3% drop in educational building while highway construction edged higher by 0.3%.
Elekta rallied 1.50 percent in Stockholm after its first quarter core profit topped forecasts.
“It is too early to say whether the rebounds in growth and inflation will be sustained, but the upturn in August suggests that the weaker exchange rate and recent policy action have helped to avert a downturn”, said Rob Dobson, senior economist at IHS Markit. The flash reading was 51.8.
Indeed, August saw new export orders expand at the quickest rate in one year.
The Markit/CIPS UK Manufacturing purchasing managers’ index said companies were taking “a business as usual” approach, as activity swung to a 10-month high in August following a slump in the immediate aftermath of the European Union referendum result.
According to the survey, the New Orders Index registered 49.1%, a decrease of 7.8 percentage points from the July reading of 56.9%.
Britain’s top shares index dipped on Thursday, as the market’s initial gains fizzled out following a jump up in sterling after data which showed a rebound in the United Kingdom manufacturing sector. Economists had expected the reading to fall to 50.1.
Meanwhile, the official PMI rose to 50.4 from 49.9 in July.
“The August manufacturing data also suggests inflationary pressure is starting to build in the system, as a weaker pound feeds through into higher prices”.
Other Eurozone data published on Wednesday was mixed, as German retail sales improved month-on-month in July but plunged year-on-year, while German unemployment dropped by a better-than-expected 7k.
The report said initial jobless claims crept up to 263,000, an increase of 2,000 from the previous week’s unrevised level of 261,000.
More positively, the United States weekly jobless claims rose less than expected.
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Labor productivity in the USA declined by slightly more than initially estimated in the second quarter, according to a report released by the Labor Department on Thursday. The revision matched economist estimates. “Indeed the report highlights that inflation is picking up fast as input costs increase”, said Neil Wilson, markets analyst at ETX Capital, in a note.
