For all the talk of Dollar weakness and its demise as a reserve currency, the Dollar trade-weighted index has been remarkably stable in the past six sessions, trading in a narrow range of just 0.8%.
The Dollar showed little reaction to the release yesterday of slightly better-than-expected ISM manufacturing PMI data for July. The index of US manufacturing sector activity rose to 54.2 in July – its highest level since March 2019 – from 52.6 in June, pointing to a brisk recovery in US manufacturing output.
Sterling has also been pretty stable in the past three trading sessions although it has lost a bit of ground against both the Dollar (GBP/USD is back down to 1.303) and the Euro (GBP/EUR back below 1.11). Sterling may be starting to react to the flow of bad news out of the UK, specifically the re-tightening of regional lockdowns and threat of a national re-tightening of lockdown and social distancing rules.
