Investing.com - Manufacturing activity in the U.S. expanded at the slowest rate in more than two years in August, dampening optimism over the strength of the economy and fanning hopes that the Federal Reserve could delay raising interest rates till the very end of 2015, industry data showed on Tuesday.
In a report, the Institute for Supply Management said its index of purchasing managers fell to 51.1 last month from a reading of 52.7 in July. Analysts had expected the manufacturing PMI to dip to 52.6 in August.
The New Orders Index registered 51.7, a decrease of 4.8 points from the reading of 56.5 in July.
The Production Index registered 53.6, 2.4 points below the July reading of 56.0.
The Employment Index registered 51.2, 1.5 points below the July reading of 52.7.
The Prices Index registered 39.0, down 5.0 points from the July reading of 44.0, while the New Export Orders Index registered 46.5, down 1.5 points from the July reading of 48.0.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Comments from the panel reflect a mix of modest to strong growth depending upon the specific industry, the positive impact of lower raw materials prices, but also a continuing concern over export growth.
EUR/USD was trading at 1.1277 from around 1.1252 ahead of the release of the data, GBP/USD was at 1.5345 from 1.5332 earlier, while USD/JPY was at 119.77 from 120.00 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.46, compared to 95.63 ahead of the report.
Meanwhile, U.S. equity markets were down sharply after the open. The Dow 30 plunged 2.2%, the S&P 500 tumbled 2.1%, while the Nasdaq Composite sank 1.6%.
Elsewhere, in the commodities market, gold futures traded at $1,142.20 a troy ounce, compared to $1,141.80 ahead of the data, while crude oil traded at $47.20 a barrel from $47.21 earlier.