US Dollar Slides on Disappointing Data

The US dollar is losing ground against a basket of currencies on Tuesday after a flurry of data was released and disappointed the market. The one positive this week has been the rise in housing prices, which have been running on a treadmill for more than a year. With the US-China trade war taking a breather, investors may be finding short-term direction on data instead of geopolitical events.

The Institute of Supply Management (ISM)’s manufacturing purchasing managers’ index (PMI) clocked in at 51.7 in June, down from 52.1 in May. The reading did beat the market consensus of 51.0 – anything above 50 indicates expansion. The ISM’s manufacturing orders tumbled from 52.7 in May to 50.0 in June, while manufacturing prices fell into contraction territory of 47.9. The ISM’s manufacturing employment index also surged from 53.7 in May to 54.5 in June.
The ISM New York Current Business Conditions index crashed in May to 48.6, down from 77.3 in April. It did pick up a bit in June to 50, supported by gains in employment.
According to CoreLogic, a real estate data provider, national home prices recorded a stronger annual gain, which is the first time in more than a year that prices have surged from one month to the next. In the 12 months ending in May, prices climbed 3.6%, representing a 0.3% increase in April.
Industry experts project that home prices will enjoy a 5.6% spike in the coming 12 months.
It all seems to be quiet on the geopolitical front. US-China trade negotiations are back on, a military conflict between Washington and Tehran has subsided, and developments in the Korean Peninsula continue to be positive. Though there are concerns about Vice President Mike Pence returning to Washington and canceling events, the greenback is not being driven by what is happening in international politics right now.
The US Dollar Index declined 0.14% to 96.71.
The USD/CAD currency pair tumbled 0.19% to 1.3111, from an opening of 1.3134, at 17:10 GMT on Tuesday. The GBP/USD fell 0.25% to 1.2606, from an opening of 1.2642.

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