ISM Services Purchasing Manager index (PMI)
The Institute for Supply Management (ISM) Services survey expectedly expanded for the second straight month in August, with the index increasing to 51.5 from 51.4 the month prior.
US Economic Calendar – September 5, 2024
A deeper look at the report showed that the ‘New Orders Index expanded to 53 percent in August, 0.6 percentage point higher than July’s figure of 52.4 percent,’ while the employment component expanded for the third time in 2024 as it printed at 50.2.
At the same time, the ‘Prices Index registered 57.3 percent in August, a 0.3-percentage point increase from July’s reading of 57 percent,’ with the report going onto say that ‘ten industries reported growth in August.’
EUR/USD Chart – 15 Minute
Chart Prepared by David Song, Strategist; EUR/USD on TradingView
EUR/USD slipped below 1.1100 following the better-than-expected ISM survey, but the market reaction was short lived as the exchange rate closed the day at 1.1110. Nevertheless, EUR/USD came under pressure going into the end of the week to close at 1.1085.
Looking ahead, the ISM Services PMI is expected to expand for the third consecutive month in September, with the index projected to increase to 51.6 from 51.5 in August.
With that said, a positive development may generate a bullish reaction in the US Dollar as it puts pressure on the Federal Reserve to further combat inflation, but a weaker-than-expected ISM survey may produce headwinds for the Greenback as it fuels speculation for another 50bp rate cut.
--- Written by David Song, Strategist
Follow on Twitter at @DavidJSong
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