Investing.com – Activity in the US manufacturing sector registered a surprise increase in November reaching a one-and-a-half year 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 to 53.9 in November from the prior month’s final reading of 53.4. That was the strongest reading since March 2015.
Analysts had expected no change to October’s reading.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Markit further indicated that the data showed the strongest upturn in new orders since October 2015 and that inventory building continued in November.
“November data highlighted a sustained acceleration in production growth across the U.S. manufacturing sector and the latest upturn was the fastest since early-2015,” the market research group said.
“US manufacturers enjoyed a strong post-election bounce in November, further tilting the scales toward the Fed hiking rates in Decembe," Markit chief business economist Chris Williamson said in the report.
“The buoyant post-election picture of the manufacturing economy and signs of increased optimism about the future will further fuel the conviction that the Fed will raise interest rates at its December 13-14 meeting, and may also raise the possibility that policymakers might be inclined to tighten somewhat more aggressively in 2017 than previously thought, although much of course also depends on the new government’s policy framework,” he concluded.
Immediately following the report, EUR/USD was trading at 1.0553 from around 1.0543 ahead of the release of the data, GBP/USD was at 1.2401 from 1.2373 earlier, while USD/JPY was at 112.31, compared to the prior 112.35.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 101.74, compared to 101.83 ahead of the report.
Meanwhile, U.S. stocks were trading lower after the open as the Dow 30 slipped 7 points, or 0.04%, the S&P 500 declined 7 points, or 0.31% , and the tech-heavy Nasdaq Composite traded down 32 points, or 0.59%.
Elsewhere, in the commodities market, gold futures traded at $1,190.15 a troy ounce, compared to $1,191.85 ahead of the data, while crude oil traded at $47.55 a barrel from $47.80 earlier.