Dollar Index and Services PMI Both Fell
The US Dollar Index measures the strength of the US dollar against other major currencies. It fell by 0.58% on December 18, 2015. It was on a correction mode.
Dec. 21 2015, Published 10:55 a.m. ET
US Dollar Index fell by 0.58%
The US Dollar Index measures the strength of the US dollar against other major currencies. It fell by 0.58% on December 18, 2015. The index was on a correction mode after the near 1.5% rise the previous day after the federal funds rate hike. The weak domestic data compounded the fall. The US services PMI came out on a negative note. The next week doesn’t have major data releasing except for the quarter-over-quarter final GDP (gross domestic product. It’s scheduled for December 22. The employment data are scheduled for December 24.
Services PMI is below the forecasts
Markit published the services PMI (purchasing manufacturers index) for December. It came out on December 18, 2015. The PMI release was below the expectations at 53.7. It was 56.1 last month. December saw the weakest rise in the service output since December 2014. The business confidence in service providers also fell to the lowest level since August 2010. The report indicated a sharp slowdown in new business growth.
Impact on the market
In terms of the ETFs, the PowerShares DB US Dollar Bullish ETF (UUP) fell by 0.58% on December 18, 2015, after a sharp rise the previous day. The WisdomTree Bloomberg US Dollar Bullish Fund ETF (USDU) encompasses developed economies as well as emerging market currencies. It fell by 0.39%.
The banking ADRs (American depositary receipts) were trading on a negative note on December 18, 2015. JPMorgan Chase (JPM) fell by 2.8% while Citigroup (C) fell by 3.1%. Wells Fargo (WFC) also followed a similar trajectory. It fell by 3.0% for the day.
