The US manufacture sector in March 2021 is expansed in Its quickest speed sinar 1983. That was supported by the abundant of production and orders. It is especially in last 17 years. This manufacture data is a prove that the American economy is okay.
Their economic continues to expand. The US PMI manufacture data released by ISM on Thursday showed the sharp increase. That was from 60.8 to 64.7 in March. The index of level beyond 50 is showing an expansion. It was also higher than what people predicted.
Before, the market participants and experts expected that the increase will be 61.5. In fact, this achievement also becomes the highest one in the last 38 years. The stronger new order growth and the bolder output is caused by several different factors.
What are Those Important Factors?
Those factors are like the vaccine implementation, the decreasing social limitation policy due to the pandemic, and the support of fiscal stimulus that makes the United States economy recovery is smoother. The manufacture in economy continues its recovery.
That is especially in March. Together with that the purchasing managers reported that the companies and suppliers continue their effort to fulfill the increasing demands. The reason is that the coronavirus limits the stocks of materials and equipment.
All except one of the 18 ISM manufacture industries reported the growth in March. It was leaded by the textile sectors, tools, and etc. That is also included the electricity, engine, computer, and electronic equipment. Elsewhere, the USD is slipped.
Further more, that main currency is also consolidated in a high level. The index of dollar decreased by 0.36 percent to 92.9 when this news was released. That consolidated to it’s highest level since this week. It may be there for a long time.
Why Dollar Declined Sharply
An analyst predicted that the USD decline is more because of the development in the United States employment sector. It is not too satisfying. The weekly jobless claim rose for more than what people are expected since the hope to decrease that number.
Jobless is the biggest problem which is caused by the COVID-19 in the economic area. Before, the index of dollar was steady on it’s highest range. It was the multi-month characteristic around the level of 93.30 in the yesterday sales. There is one more thing to know.
The non-farming employment change days last night was up from the expectation. However, the market participants are still optimism that the United States will grow faster than any other big countries in the world. What is the reason for that?
In fact, the foreign cash flow is still coming to America. ADP reported that the non-farming sector there only recorded 517k jobs in March 2021. That number is higher than the 176k number in February, but less than the concensus expectation.
Some Factors Support the Greenback Association
Aside from that, the USD still becomes a champion. Some factors support the greenback appreciation. Those are like the new lock down wave in Europe, the acquisition of the US million dollar enterprise by Japan, the successful vaccination program in America, etc.
Besides that, the announcement of the infrastructure building plan in that country also becomes one of the factors. Two factors above have been pressing EUR / USD to come closer to it’s lower record in five months. It also makes the USD / JPY increase.
That pair increased to it’s highest record in a year. On Wednesday, Emmanuel Macron as the President of France announced the national lock down for the third times. It was done to stop and handle the increasing positive cases of coronavirus in that country.
