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US economy showing some softness - RBS

FXStreet (Łódź) - According to Greg Gibbs, FX Trading Strategist at RBS, the latest string of weaker than expected US data doesn't allow for excessive optimism on the state of the US economy.

Key quotes

"US economic data overnight was also weaker than expected, including the Chicago Fed's National Activity index. It was revised down significantly in July from 0.39 to 0.26 and fell to -0.21 in August, well below an expected 0.33."

"Also released overnight were softer-than-expected existing home sales. They dipped by 1.8%m/m in August, but this was after they rose 12% over the preceding four months. They remain 6% below the peak last year in July."

"Today in the US the relatively new flash Markit PMI for manufacturing is released for September. It was at a record high for this series in August (since 2011) at 57.9, well above other major economies."

"The USD may be vulnerable to some consolidation against other majors, especially if we see a lull in the US economic outlook delaying rate hike expectations in the US."

"However, relative growth and monetary policy trends suggest that we need to be cautious about getting caught up in these moves that are still likely to be against the broader trend towards a stronger USD."

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