by FXStreet Insights Team
FX Street
The Dallas Fed’s Manufacturing Activity Indicator delivered more bad news yesterday. At roughly -36, it was almost 19 points worse than expected. New orders plummeted significantly, while prices paid rose significantly. No wonder that the US dollar came under pressure again yesterday. In line with this, Bloomberg recently published the results of its April survey of economists, and the findings are likely to have further heightened US stagflation concerns, Commerzbank’s FX analyst Michael Pfister notes.
Asian trade diversion may strain US relations
“Imports from Japan, South Korea, Taiwan, and Vietnam collectively overtook imports from China at the beginning of 2023. Will the governments of these four countries allow companies to increasingly ship goods through their countries? This seems questionable to me, as this would further increase these countries’ current account surpluses in trade with the US and complicate any potential deals with the US. And Trump is unlikely to be in a position to turn a blind eye to such shifts in trade flows this time.”