FXStreet (Mumbai) – The FX strategy team at RBS believes the US manufacturing sector could continue to weaken in the days ahead as falling oil prices lead to renewed weakness in the energy sector.
Key Quotes
“Lower energy prices have dampened manufacturing activity in energy producing states, and the renewed fall in oil prices may see a secondary pullback in this sector in coming months.”
“Two manufacturing surveys from energy developing regions released in recent days improved less than expected from earlier slumps. The Kansas City Fed (-7) and Dallas Fed (-5) indices in July, both remain below neutral zero levels. Both are up from their lows in May (-13 and -21 respectively), but this recovery may now stall with renewed falls in energy prices.”
“Also influenced by the energy sector down-turn, durable goods orders in the US are struggling to recovery after a significant pullback from the peak in September last year to a recent low in February this year.”
(Market News Provided by FXstreet)