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US August ISM Manufacturing PMI is likely to fall - ING

FXStreet (Łódź) - James Knightley from ING believes that the weak European and Asian PMIs for August suggest that the US ISM Manufacturing could also drop, to 56.4 from 57.1 seen in July.

Key quotes

"The ISM manufacturing index has historically been one of the best lead indicators for GDP and its recent strong performance suggests that GDP growth could soon accelerate up towards 4%YoY, well ahead of the full year consensus GDP figure of 2.1%."

"Rising geopolitical tensions and a softening European and Asian growth story, we feel, are likely to dampen US activity after such a strong run."

"However, the regional purchasing managers’ indices have not been showing this as yet."

"The Chicago PMI bounced massively in August while the Philly Fed and Empire surveys are also at levels suggesting that the ISM can hold onto its gains."

"Consequently, the balance of risks do seem skewed towards the upside in terms of our forecast."

"In the absence of any positive news on Europe such an outcome would reinforce the strong dollar trend with our 1.28 year-end target for EUR/USD looking increasingly achievable."

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