US dollar bounces back on strong ISM services – updates

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The US dollar initially fell on the disappointing Non-Farm Payrolls. The miss on the headline and more importantly the poor wages data sent the dollar lower.

Yet the greenback gradually recovered and pared the losses. It then got another boost from genuinely positive data. Factory data came out at +1.4%, better than 1.3% expected and 1.2% seen last time. The report also included upwards revisions to core durable goods orders: 1.7% against 1.3%. Excluding air and defense, it is 0.9% instead of 0.7% originally published.

And the big boost came from the ISM Non-Manufacturing PMI topped the high level of 60, scoring 60.1 points in October. This is an excellent number, reflecting very strong growth in the services sector, the largest in the US.

The employment component reached 57.5 points, up from 56.8 points. Prices paid are down from 66.3 to 62.7 point. New orders are similar, at 62.8 points. All in all, the score is at the highest since 2005.

USD likes the data

This services sector report serves as a hint to the NFP, when it is published before the jobs report of course. Nevertheless, it shows its impact right now.

  • EUR/USD is sliding below support at 1.1620, but so far escapes the 1.16 level.
  • USD/JPY is moving up again, reaching 114.42. It is getting closer to the cycle high of 114.50.
  • GBP/USD is trending lower again, trading at 1.3070.
  • USD/CAD is off the lows it reached in the excellent Canadian jobs report, trading around 1.2770.
  • AUD/USD is at 0.7645, close to support at 0.7640.

More: GBP/USD: What’s next after the BOE’s blow?

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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 the 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.

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