"The US dollar traded near multi-week highs on Thursday, supported by stronger-than-expected ISM Services data that helped offset concerns triggered earlier in the week by weak manufacturing figures. The ISM Services PMI rose well above expectations of 52.3 points. The report signalled the strongest expansion in the services sector since October 2024, with all subcomponents back in expansion territory for the first time since February. Notably, the employment index rebounded to 52 from 48.9, easing fears of a sharper labour market slowdown."
"These figures have reinforced the view that the US economy remains resilient, favouring expectations of a slightly less dovish stance from the Federal Reserve. As a result, the dollar found support alongside treasury yields. For now, markets continue to expect the Fed to keep interest rates unchanged at its January meeting. However, gains could be capped by new labour market data."
The US dollar traded near multi-week highs after stronger-than-expected ISM Services data offset earlier weak manufacturing figures. The ISM Services PMI rose well above the 52.3 expectation, indicating the strongest services expansion since October 2024. All subcomponents returned to expansion for the first time since February, and the employment index recovered to 52 from 48.9. These readings reinforced views of economic resilience and increased expectations of a slightly less dovish Federal Reserve, supporting the dollar and treasury yields. Markets still price the Fed to keep rates unchanged in January. Upcoming initial jobless claims and Friday's nonfarm payrolls could cap gains and produce volatility.
Read at London Business News | Londonlovesbusiness.com
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