American focus: the dollar rose

The U.S. dollar rose against major currencies after strong data on manufacturing activity and new home sales.

As the results of studies that were presented Markit Economics, in July, preliminary index of business activity in the U.S. manufacturing sector rose to 53.2, up from 52.2 in June. It is worth noting that, according to the average forecast of experts this figure had climbed to 52.5.

At the same time, as shown by recent data that has been provided by the Ministry of Commerce, at the end of last month new home sales rose markedly, reaching a five-year high at the same time, increasing the likelihood of an early economic recovery. According to the report, in June, sales of new homes rose to a seasonally adjusted 8.3%, reaching a level with 497 thousand units. We add that this was the highest since May 2008. Compared to the same period last year, sales were up 38.1%. Economists had expected sales to increase by only 482 thousand, compared to a revised downward indicator for the last month at 459 million (originally reported 476 thousand).

Earlier, the European currency rose against the U.S. dollar, which has been associated with the publication of upbeat data for the euro area. According to a report from Markit Economics, the composite index of production, which measures business activity in both sectors, rose in July to a 18-month high - at 50.4, down from 48.7 in June. It is worth noting that, according to the average forecast of economists, the value of this indicator was up to the level of 49.1. Recall that the index value above 50 indicates expansion of activity in the sector, while a drop below 50 suggests contraction. Meanwhile, it was reported that the index of business activity in the manufacturing sector rose to the level of 50.1, down from 48.8 in June. We add that the latest reading was the highest in the last 24 months. Many experts have predicted an increase only to the level of 49.1. The data also showed that the index of business activity in the services sector rose in July to the level of 49.6, down from 48.3 in June. The value of this index was the highest in the last 18 months. Economists had expected only a slight increase - to 48.9.

The Australian dollar and the Japanese yen fell against the dollar after the release of negative statistics from China. As the results of recent studies that have been presented today Agency HSBC, the index of manufacturing activity in China fell in July to a level of 47.7, which was the minimum value over the past 11 months. Recall that in June, the index was at around 48.2. In addition, the data showed that the index of industrial production fell from 48.6 in June to 48.2 - a minimum of nine months. Recall that the index value below 50 show a decrease in activity, while growth above this mark suggests the extension.

HSBC experts point out that the continuing decline in index of business activity in the industry is a sign of a slowdown in China's industry due to the reduction of new orders component and a faster reduction in inventories. It also adds pressure on the labor market. Given the fact that the Chinese authorities have recently announced that they will provide a minimum accepted level of economic growth needed to ensure job security, data on the index of business activity showed the need for incentives to stabilize the growth of the economy.