Dollar Traders Await ISM Services Report
The US service economy rebounded in March from a four-year low, according to a consensus of market analysts awaiting Thursday’s non-manufacturing PMI report.
Thursday’s report on the US service economy, courtesy of the Institute for Supply Management, is this week’s final major release ahead of Friday’s nonfarm payrolls report. The ISM’s monthly non-manufacturing PMI is expected to rebound nearly 2 percentage points to 53.5.
ISM’s gauge of national services activity fell to a fresh four-year low in February, declining from 54 to 51.6. Although ten of the 18 non-manufacturing industries expanded in February, employment activity unexpectedly declined for the first time in more than two years. Nevertheless, February marked the 49th consecutive month service activity was in expansion mode.
The March reading is expected to reflect the US economy’s broader rebound last month. An advance estimate of job creation released today by the ADP Institute said US employers added 191,000 payrolls in March, the sharpest increase since December. Service providers added 164,000 payrolls, following a revised gain of 153,000 in February, ADP data showed.
Much like manufacturing PMI, data on service activity could be a catalyst for the forex market. The US dollar is expected to react sharply should the ISM reading deviate from the consensus in either direction.
In the early North American session the US dollar index was relatively unchanged, hovering at 80.13. The index was virtually unchanged over the past five days.
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