USD flows: USD gains on strong PMI

Much stronger than expected S&P PMIs from the US have given the USD a boost, more than reversing the softer tone seen after the claims data. There remains some uncertainty about the accuracy of the S&P PMIs as a contemporaneous guide for the US economy, but with the composite PMI matching the high from December last year, it’s hard to oppose USD strength. The implications for the equity market are less clear with US yields up on the data, but the USD looks likely to extend gains across the board. AUD/USD may be the most vulnerable as it is threatening the support at 0.64 and tend to suffer when equity markets weaken.