Investing.com – Activity in the US manufacturing sector increased as expected in December, hitting a 21-month high, according to preliminary data released on Wednesday.
In a report, market research group Markit said that its flash manufacturing purchasing managers’ index (PMI) rose as expected to 54.2 in December from the prior month’s final reading of 54.1.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Markit highlighted that the stock of inputs accumulated at the fastest pace since the survey began in May 2007 and was accompanied by “robust rises in output, new orders and jobs”.
The research firm considered the data to show a “strong end to 2016 with business conditions improving at the fastest pace since March 2015.”
According to Markit chief economist Chris Williamson, the data put “the sector on the starting blocks ready for a further upturn as we move into 2017” and added that the goods producing sector looked on track for 2% to 2.5% growth in the fourth quarter.
“The combination of solid growth and rising price pressures adds to the likelihood of further Fed action in 2017, with three more quarter point hikes anticipated next year by IHS Markit,” Williamson concluded.
In an immediate reaction, EUR/USD was trading at 1.0441 from around 1.0438 ahead of the release of the data, GBP/USD was at 1.2490 from 1.2488 earlier, while USD/JPY was at 118.17, compared to the prior 118.08.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 102.94, compared to 102.96 ahead of the report.
Meanwhile, U.S. stocks were trading higher after the open as the Dow 30 gained 67 points, or 0.34%, the S&P 500 rose 9 points, or 0.41% , and the tech-heavy Nasdaq Composite traded up 22 points, or 0.41%.
Elsewhere, in the commodities market, gold futures traded at $1,131.65 a troy ounce, compared to $1,133.50 ahead of the data, while crude oil traded at $50.39 a barrel from $50.24 earlier.