• ISM Manufacturing PMI declined to 46.8 in July, pointing to ongoing contraction.
• US Dollar Index declines toward 104.00 after disappointing data.

The business activity in the US manufacturing sector continued to contract at an accelerating pace in July, with the ISM Manufacturing PMI declining to 46.8 from 48.5 in June. This reading fell short of the market expectation of 48.8.

The Employment Index of the PMI survey declined sharply to 43.4 from 49.3.1 in June, while the New Orders Index fell to 47.4 from 49.3. Finally, the Prices Paid Index, the inflation component, rose to 52.9 from 52.1 in the same period.

Commenting on the survey's findings, "US manufacturing activity entered deeper into contraction. Demand was weak again, output declined, and inputs stayed generally accommodative," said Timothy R. Fiore, Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. 

Market reaction

The US Dollar came under renewed selling pressure following the disappointing PMI data. At the time of press, the US Dollar Index was up 0.1% on the day at 104.12.