U.S. Dollar Climbs As ISM Services PMI Exceeds Expectations
September 06 2023 - 8:55AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the New York session on Wednesday, as ISM non-manufacturing PMI
came in higher than expected in August, raising the prospect of
higher for longer rate policy by the Federal Reserve.
The ISM said its services PMI rose to 54.5 in August from 52.7
in July, with a reading above 50 indicating growth in the sector.
The increase surprised economists, who had expected the index to
edge down to 52.5.
Risk sentiment soured as higher crude prices renewed concerns
about persistent inflation.
The price of crude oil reached its highest levels since last
November on Tuesday after Saudi Arabia and Russia extended supply
cuts until the end of the year.
Recent downbeat data out of Europe and China fuelled fears of a
slowdown in global growth.
The greenback climbed to multi-month highs of 0.8944 against the
franc and 1.2481 against the pound, from its early lows of 0.8881
and 1.2587, respectively. The currency is seen facing resistance
around 0.92 against the franc and 1.21 against the pound.
The greenback appreciated to multi-month highs of 1.0702 against
the euro and 1.3676 against the loonie, off its early lows of
1.0748 and 1.3622, respectively. The currency may challenge
resistance around 1.04 against the euro and 1.38 against the
loonie.
The greenback rose to session's highs of 0.6357 against the
aussie and 0.5859 against the kiwi, up from its previous lows of
0.6404 and 0.5904, respectively. Next key resistance for the
greenback may be located around 0.60 against the aussie and 0.57
against the kiwi.
The greenback rebounded to 147.70 against the yen, heading to
pierce its previous nearly 1-year high of 147.81. If the currency
rises further, 151.00 is likely seen as its next resistance
level.
Looking ahead, the Fed Beige book report will be released in the
New York session.
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