EUR/USD Back to Yearly Lows as ISM Services Hits 9 Year High
- July ISM Non-Manufacturing/Services at 58.7, the highest level since December 2005.
- ISM says “gains coming from almost every [US] industry.”
- EURUSD dives towards yearly low near $1.3366.
US economic data has been improving steadily over the last several weeks, aiding the US Dollar’s recent rebound. Although the greenback sold off modestly after the July US Nonfarm Payrolls report, it’s evident by the strength of hiring (>+200K in six consecutive months) that the US economy is hitting somewhat of a more consistent stride. Data released today fits in with this narrative.
Two reports out this morning are helping the US Dollar continue along its recent bull run. Here’s the data lifting the buck:
- ISM Non-Manufacturing/Services Composite (JUL): 58.7 versus 56.5 expected, from 56.0.
- Factory Orders (JUN): +1.1% versus +0.6% expected, from -0.6% (revised lower from -0.5%) (m/m).
These data are notable as they both have achieved new relative highs. For the July ISM Services report, the headline reading at 58.7 is the highest such level since December 2005. Considering that nearly four out of five jobs in the United States are in service industries, the strong rates of gain in the index point to sustained economic momentum through midyear.
Similarly, the June Factory Orders report showed the fastest rate of expansion since March, and the gains represented the biggest ‘beat’ (actual minus expectation) in nine months.
EURUSD 1-minute Chart: August 5, 2014 Intraday
Charts Created using Marketscope – prepared by Christopher Vecchio
Around the announcement, EURUSD moved to fresh yearly lows at $1.3363, eclipsing the prior yearly low set last week at $1.3366. The US Dollar was moving up broadly across the board after the announcement, with USDCAD, USDCHF, and USDJPY all trading to/near their respective daily highs.
--- Written by Christopher Vecchio, Currency Analyst
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