Growth in manufacturing in the U.S. loses its traction. In February it grew by 0.1% after the decline by 0.4% a month earlier. Year over year growth slowed to 3.5% against peak 5.7% in September 2018. An additional disturbing sign is a drop in Capacity Utilization Rate since the end of last year.
This parameter is often considered a good inflationary indicator. The growth of production at high capacity loading increases inflationary pressure, as manufacturers shift to consumers the costs of expansion of production. But in our case inflationary pressure from this side decreases. Production statistics are so important for the Fed that it is the central bank that makes its assessment, so the data on the growth of 0.1% against expected 0.4% on the results of February caused pressure on the dollar. USDX lost 0.2%, moving away from intraday highs.
Alexander Kuptsikevich, the FxPro analyst
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