ISM non-manufacturing PMI: 59.7 vs 57.4 exp
USD gains after solid data point
EURUSD at 1.13, USDJPY at 112
The US has rounded off a day of service sector data with a strong reading that has boosted the greenback to its highest levels of the day. After an early disappointment from China, the service figures on the whole have been pleasing, none have been more so than the ISM non-manufacturing PMI which rose to 59.7 for February. Not only is the reading the highest in 3 months, but it is also comfortably above the 57.4 expected and 56.7 seen last time out.
After two consecutive disappointments the ISM non-manufacturing bounced back in February and is now back not far from its highest level in several years. Source: Bloomberg
Not only was the headline reading strong, but the new orders figure was a standout. This metric rose to 65.2 from 57.7 prior in what is the highest release for this data point since 2005! Other subcomponents such as the employment (55.2 vs 57.8 exp) and prices paid (54.4 vs 59.4 prior) did disappoint which may be seen to take the shine off the overall index and new orders. On balance the initial reaction has been positive for the US dollar with EURUSD breaking below the 1.13 handle while the USDJPY has moved above 112.
The EURUSD has fallen to its lowest level in over a fortnight since the release with the pair breaking below the 23.6% fib at 1.1300 in doing so. Source: xStation
USDJPY has also taken out a big round number in moving above the 112 handle to trade at its 2019 highs. However, the region around 112.35 may still provide some resistance to a larger move higher. Source: xStation