USD: Economic activity continued to expand at a modest pace – Fed’s Beige Book

The Fed published today the Beige Book of current business conditions around USA, here are the key points:

  • Economic activity continued to expand at a modest pace overall from mid-May through early July, with little change from the prior reporting period.
  • Manufacturing production was generally flat, but a few Districts noted a modest pickup in activity since the last reporting period.
  • Employment grew at a modest pace, slightly slower than the previous reporting period. Labor markets remained tight, with contacts across the country experiencing difficulties filling open positions.
  • . Compensation grew at a modest-to-moderate pace, similar to the last reporting period, although some contacts emphasized significant increases in entry-level wages.
  • However, firms’ ability to pass on cost increases to final prices was restrained by brisk competition. Reduced supply boosted prices for some agricultural goods.
  • Prices for professional and business services fell slightly, and steel and lumber prices softened due to lower demand.

The Dollar index didn’t react on the news at trades 0.19 percent lower at 97.19 close to daily low at 97.16. The EURUSD is trading at 1.1228 trying to break above the 50 hour moving average and regain the positive momentum. I am neutral on the pair and I am looking for a break above 1.1243 to enter a long position.Don’t miss a beat! Follow us on Twitter.