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ISM Non-Manufacturing PMI falls to 56.9 – USD takes it

A slight disappointment, but not totally unexpected: the US services sector is slowing down with 56.9 points in September. While it falls short of expectations, there are some positives here: the employment  component is up from 56 to 58.3 points.  

The US dollar is  looking for a direction in the immediate aftermath.

Had the report been released before the NFP, perhaps we would have seen a stronger reaction. Why? The excellent employment component  would have raised expectations and in turn, these would have hit the wall.

The new orders component provides the biggest  shortcoming, with a big fall from the super strong 63.4 points to 56.7. Business activity is at 60.2, also lower.

  • EUR/USD is a bit higher at 1.1220, still far from breaking the wedge. The pair made a second, failed attempt to move higher.
  • AUD/USD stands out by extending its falls,  currently 0.7060, after failing to settle above 0.71.

The Labor Market Conditions Index dropped to 0 after 2,1  points last time. This is a separate report.

The ISM Non-Manufacturing Purchasing Managers’ Index was expected to show a drop to 57.5 points in September after 59 in August, still reflecting strong growth.

Towards the publication, the dollar was slightly stronger

This indicator, which provides a forward looking snapshot of America’s largest sector, usually serves as a hint towards the Non-Farm Payrolls. This time, the publication comes after Friday’s Nightmare NFP. Nevertheless, it provides a look at the state of the economy.

Earlier, similar PMIs from Europe, the UK and China all pointed to slowing economic activity. Markit’s US services PMI was revised to the downside: 55.1 points in September.

In our latest podcast we discuss the Nightmare NFP,  Judge  Japan and Natural Gas:

Download it directly here

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.