Services PMI Shows Improvement
According to data released by the Institute for Supply Management (ISM), the services PMI for October stood at 52.4, which is an increase from 50.0 in September and surpasses expectations of 50.8.
Additionally, the Prices Paid Index, indicating inflation trends, increased slightly from 69.4 to 70.0. The Employment Index experienced a minor rise from 47.2 to 48.2, while the New Orders Index climbed from 50.4 to 56.2.
Market Reaction
Following the release of the US ISM Services PMI report, the US Dollar gained momentum, pushing the US Dollar Index (DXY) to new highs in the 100.30-100.40 range, thus extending its current recovery.
Current USD Prices
Today’s table shows the percentage change of the US dollar (USD) against various major currencies, with the dollar performing strongest against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.02% | 0.42% | 0.27% | -0.01% | 0.15% | 0.18% | |
| EUR | -0.06% | -0.06% | 0.37% | 0.21% | -0.07% | 0.11% | 0.11% | |
| GBP | -0.02% | 0.06% | 0.42% | 0.25% | -0.03% | 0.15% | 0.16% | |
| JPY | -0.42% | -0.37% | -0.42% | -0.15% | -0.42% | -0.27% | -0.24% | |
| CAD | -0.27% | -0.21% | -0.25% | 0.15% | -0.28% | -0.12% | -0.09% | |
| AUD | 0.00% | 0.07% | 0.03% | 0.42% | 0.28% | 0.17% | 0.17% | |
| NZD | -0.15% | -0.11% | -0.15% | 0.27% | 0.12% | -0.17% | 0.01% | |
| CHF | -0.18% | -0.11% | -0.16% | 0.24% | 0.09% | -0.17% | -0.01% |
This table reflects the percentage changes between major currencies, showing how the selected base and quote currencies compare in value.
The ISM Services report is crucial, as it often indicates the health of the services sector and broader economic activity.
Analysts estimate a modest expansion will continue, pushing the ISM Services PMI slightly up, potentially affecting the valuation of the US dollar amidst the ongoing government shutdown and its impact on key economic data releases.
Expectations for the ISM Services PMI Report
Analysts anticipate a small uptick in the services PMI, suggesting some recovery in activity. Experts, like those from TD Securities, expect a partial rebound from a disappointing previous month, particularly focusing on employment trends.
The previous employment index was low, indicating ongoing job challenges in the sector, though recent comments from Fed Chairman Jerome Powell noted that while job creation remains slow, he doesn’t foresee a significant worsening of the situation. Rate cut discussions are also nuanced, with December cuts not yet guaranteed.
Moreover, inflation, as indicated by the price paid index, remains robust, staying above 69 for the third month in a row.
Current market projections suggest a 67% likelihood of a 25 basis point rate cut in December, reflecting ongoing uncertainty.
What to Expect from the ISM Services PMI Report?
The ISM Services PMI report is scheduled for release on Wednesday at 15:00 GMT. If the report exceeds expectations and shows a recovery in employment, it might bolster the dollar while putting downward pressure on EUR/USD.
Conversely, a disappointing report could reignite concerns for more easing measures, negatively impacting the dollar and potentially giving EUR/USD a boost.
Technical analysts have highlighted a bearish outlook for EUR/USD, as indicators point to increasing momentum against the euro. Significant levels of support and resistance have been noted, outlining a potential path for movement based on the upcoming report.
