(MENAFN) The ISM Manufacturing Index for the United States marked a notable turnaround, registering growth for the first time since September 2022, with a reading of 50.3 points. This figure surpassed expectations, signaling a potential rebound in the manufacturing sector. The release of this encouraging data had immediate effects on the financial markets, with Treasury yields experiencing an uptick. However, despite the positive manufacturing data, most US stocks saw a decline on Monday. This downward trend was attributed to investors' apprehensions regarding the timing of the Federal Reserve's decision to implement interest rate cuts.
Conversely, the dollar's performance exhibited strength against major currencies on Tuesday, albeit with fluctuations. The dollar approached its highest levels in four-and-a-half months, buoyed by reduced concerns surrounding the timing of the Federal Reserve's first interest rate cut for the year. This shift in sentiment was mirrored in the dollar's performance against the euro, nearing its highest levels in six weeks. Additionally, the dollar displayed resilience against the British pound, following the unexpected expansion in the US manufacturing sector, which had not been observed since September 2022.
Overall, the positive growth recorded in the US manufacturing sector injected optimism into the markets, albeit amid cautious sentiments regarding the Federal Reserve's monetary policy decisions. The dollar's robust performance against major currencies underscored the impact of economic data releases on currency markets, reflecting investors' reactions to shifting expectations regarding interest rates and economic growth prospects.
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