USD falls after weak Philadelphia manufacturing data

The euro rose today after mixed data from the European Union. In Germany, the manufacturing data continued to decline in February. The manufacturing PMI decreased to 47.6, which was lower than the consensus estimates of 50. In January, the PMI was 49.7. The services PMI increased to 55.1, which was better than the expected 52.8, which helped the composite PMI jump to 52.7. In France, the manufacturing PMI rose to 51.4 while the services PMI rose to 49.8. The weakening manufacturing PMI for Germany is a cause for concern as the country braces for auto tariffs from the United States. In an interview, Volkswagen’s CEO said that a 25% auto tax from the US would hit the company by more than €2.9 billion every year.

The price of crude oil continued the upward trend started in December. The reason for the gains today were the optimism on trade and the inventories from the United States. Today, Chinese negotiators will be in Washington where they will continue with negotiations. While there are many differences, experts believe that a breakthrough could still happen. Earlier today, data from the American Petroleum Institute (API) showed that inventories rose by more than 1.26 million barrels. Later today, data from the EIA is expected to show an increase of 3.08 million barrels.

The Australian dollar declined today even after the positive employment numbers for January. The employment change for January rose by 39.1K, which was more than double the expected 15.2K. The participation rate increased by 65.7%, which was better than the expected 65.6%. The unemployment rate remained unchanged at 5.0%. Meanwhile, in Japan, the manufacturing PMI declined to 48.5, which was much lower than the expected 50.4. The all industry activity index declined by -0.4%, which was worse than the expected -0.2%.

In the United States, the data released today was mixed. The initial and continuing jobless claims data of 216K and 1,725K were better than expected. The core durable goods orders for December rose by 0.1%, which was lower than the expected 0.2%. The headline durable goods orders for December rose by 1.2%, which was better than the expected 0.2%. On a negative note, the Philadelphia Fed Manufacturing Index for February declined sharply to -4.1. This was worse than the expected gain of 15.6.

XBR/USD

The price of Brent crude oil rose to a high of $67.47 as investors waited for official inventory data from the EIA. On the daily chart, the price is above the 21-day and 42-day moving average. It is however along the 200-day moving average as shown below. The pair’s RSI has also moved to the 70 level and is close to the 50% Fibonacci Retracement level. Therefore, while the upward trend could continue moving up in the long-term, the pair could move lower at these levels.

AUD/USD

The AUD/USD pair was volatile today even with the better-than-expected jobs numbers. The pair fell from a high of 0.7206 to a low of 0.7085 and then moved up slightly to a high of 0.7130. The pair is now trading at the 0.7107 level. This volatility is evidenced by the Average True Range index below. The price is also along the middle line of the Bollinger Bands. The pair will likely be volatile in the short term since there is no clearly-formed trend.

EUR/USD

The EUR/USD pair moved to a high of 1.1367 after the weak Philadelphia manufacturing data. The pair had reached a low of 1.1318. On the hourly chart below, the pair is along the upper band of the Bollinger Bands channel. It is also above the 21-day EMA and is close to the 50% Fibonacci Retracement level. The pair will likely remain being volatile as traders weigh a number of issues such as trade and the weakening of the EU economy.