By CountingPips.com
U.S. Manufacturing data, released today by the Institute for Supply Management, showed that January’s manufacturing activity grew for the 18th straight month and at the fastest rate since 2004. January’s ISM Report On Business index reading for economic activity rose to 60.8 from December’s reading of 58.5 and surpassed market forecasts as the manufacturing sector continues to rebound. According to the report, the overall U.S. economy expanded for the 20th straight month in January.
A score above 50 percent is considered to be growth and less than 50 percent is considered to be contraction in that sector. Market forecasts were predicting an 
approximate reading of 58.0 for the month.
Norbert J. Ore, chairman of the ISM Business Survey Committee, stated in the report that, “The manufacturing sector grew at a faster rate in January as the PMI registered 60.8 percent, which is its highest level since May 2004 when the index registered 61.4 percent. The continuing strong performance is highlighted as January is also the sixth consecutive month of month-over-month growth in the sector. New orders and production continue to be strong, and employment rose above 60 percent for the first time since May 2004.”
The indexes for new orders, production, prices, employment, inventories, supplier deliveries, customer inventories, exports, imports and backlog of orders all showed increasing levels for January.
The new orders index increased by 5.8 percentage points to a reading of 67.8 in January and has increased for 19 consecutive months while production rose by 0.5 percentage points to a 63.5 score and has advanced for 20 straight months. Prices and exports have also advanced for 19 consecutive months.
US Dollar on the defensive in Forex Trading.
The U.S. dollar has been lower in forex trading today against all of the other major currencies on the first full day of trading in February 2011 as positive a risk appetite has dominated the markets. The dollar has lost ground today versus the euro, British pound, Japanese yen, New Zealand dollar, Australian dollar, Swiss franc and the Canadian dollar at 11:45 am EST, according to currency data by Oanda.
The U.S. stock markets, meanwhile, have been trading sharply higher today with the Dow Jones rising by just about 100 points, the Nasdaq increasing approximately 40 points and the S&P 500 up by over 15 points at time of writing.
In commodities, Oil has edged lower by $0.57 to the $91.62 per barrel level while gold futures are lower by $1.40 to trade at the $1,332.40 per ounce level.
