Investing.com - Manufacturing activity in the U.S. picked up the pace and rose more than expected in December, according to an industry report released on Tuesday.
The Institute for Supply Management (ISM) said its index of manufacturing activity rose to 54.7 last month from November’s reading of 53.2.
Analysts had forecast a smaller increase to 53.6.
A reading above 50.0 indicates expansion in the manufacturing sector, below indicates contraction.
The ISM indicated that the survey suggested that the overall economy had grown for the 91st consecutive month.
The new orders index rose to 60.2 in December from 53.0 a month earlier.
The employment index advanced to 53.1 last month from the prior 52.3 and compared to forecasts for an increase to 52.5.
The prices paid index rose to 65.5 in December, from the previous month’s reading of 54.5 and compared to expectations for an increase to 55.5.
In an immediate reaction to the report, which was published simultaneously with construction spending for November, the dollar strengthened. EUR/USD was trading at 1.0364 from around 1.0403 ahead of the release of the data, GBP/USD was at 1.2236 from 1.2254 earlier, while USD/JPY was at 118.49 from 118.11 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 103.63, compared to 103.28 ahead of the report.
Meanwhile, U.S. stock markets were trading higher after the open. The Dow 30 gained 145 points, or 0.73%, the S&P 500 rose 20 points, or 0.91%, while the Nasdaq Composite traded up 59 points, or 1.11%.
Elsewhere, in the commodities market, gold futures traded at $1,150.50 a troy ounce, compared to $1,155.85 ahead of the data, while crude oil was unchanged at $55.02.