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EUR/USD: Trading The U.S. ISM Manufacturing Report

Manufacturing in the world’s largest economy slowed more-than-expected in July, with the ISM index falling back to 50.9 from 55.3 to mark the lowest reading since July 2009, and businesses may continue to scale back on production as the region faces a slowing recovery. The breakdown of the report showed the gauge for new orders falling to 49.2 from 51.6, with the employment component weakening to 53.5 from 59.9, while the production index slipped to 52.3 to mark the lowest reading since June 2009. The heightening risk for a double-dip recession may put increased pressure on the Federal Reserve to stimulate the ailing economy, and the central bank may show an increased willingness to expand monetary policy further in an effort to encourage a sustainable recovery. Despite the dismal print, the greenback gained ground on risk aversion, with the EUR/USD falling back below 1.4200, but the market reaction tapered off during the North American trade as

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