By Trang Nguyen, THE TAKEAWAY:U.S. ISM ManufacturingIndex Accelerated in March > Business Conditionsare Strong and Raw Material Prices areRelatively Stable > U.S.Dollar Weakens Manufacturing in the U.S. accelerated more than projected in March on increased sales and demand and relatively stable raw material price for the next few months , reversing the pullback in February. The Institute for Supply Manager’s (ISM)Manufacturing index, which tracks the amount of manufacturingactivity that occurred in the previous month, rose 1 percent to 53 .4 percent in March from 52.4 percent in the previous month . The reading exceed ed median forecast of 53.0 from the Bloomberg News survey. The annualized PMI for March corresponded to 3.7 percent increase in real gross domestic product(GDP) annually. ISM Manufacturing index has stayed above50-level for 32nd consecutive month, indicating sustainable growthin the manufacturing sector of the world’s largesteconomy. The index takes into account expectations forfuture production, new orders, inventor ies and employment deliveries. Productionexpanded for the 34th consecutive month as the Production Indexsurged 3 percent to 58.3 percent in March. New orders continue tobe slow to appear with the sub-index slightly falling 0.4 percentto 54.5 percent last month but expectation continues to be high.Labor market condition improved last month with the EmploymentIndex edging 2.9 percentage points higher to 56.1 percent inMarch. The increase in hiring for the 30th consecutive month is consistent with anincrease in the Bureau of Labor Statistics data on manufacturingemployment . Meanwhile, Inventories Index came in at 50percent, indicating that inventories are unchanged from lastmonth. ISM Prices Index, which reflects businesssentiment regarding future inflation, came in at 61. 0 last month , below a consensus estimate of 63.0. The print is 0.5 percentage points lower than the 61.0 percent registered in Februar y. This marks the third straight month of price hike in raw materialssince September 2011. Price pressures were elevated in fifteen of eighteen manufacturing industries during themonth of March , particularly high for textile mills, furniture and related products,nonmetallic mineral products, chemical products and primarymetals. USDCAD 1-minuteChart: April 2 ,2012 Chart created using Strategy Trader- Prepared by Trang Nguyen U.S. dollar loses grounds versus most of its major trading partnersexcept its euro and Swiss franc counterparts in early North American today. The dollar extends lossagainst major currencies after the ISM report showed stronger -than-expected growth in the U.S manufacturingsector that boosts risk sentiment . As can be seen from the 1-minute AUD/USDchart above, th e currency pair climbed nearly 3 0 pips from 1.0 390 to 1.0 420 . At the time this report was written, theaussie was traded at $1.0406. --- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com To contact Trang, email email@example.com
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