U.S. Dollar Extends Gains As Solid PMI Data Reduces Prospects Of Aggressive Rate Cut
2024-10-05
3801
(fxcue news) - The U.S. dollar extended gains against its major counterparts in the New York session on Thursday, as the nation's service sector activity climbed more than expected in September, reducing the likelihood of a 50 basis point rate cut by the Federal Reserve at the meeting in November.
Data from the Institute for Supply Management showed that the services PMI shot up to 54.9 in September from 51.5 in August, with a reading above 50 indicating growth. Economists had expected the index to inch up to 51.7.
With the much bigger than expected increase, the services PMI reached its highest level since hitting 55.0 in February 2023.
Traders are now pricing in a 63.7 percent chance of a 25 basis point rate cut in November.
The greenback strengthened to 3-week highs of 1.1009 against the euro, 1.3089 against the pound and 0.8543 against the franc, off its early lows of 1.1048, 1.3269 and 0.8491, respectively.
The greenback climbed to a 1-week high of 0.6829 against the aussie, near 2-week high of 0.6211 against the kiwi and a 10-day high of 1.3553 against the loonie, from its early lows of 0.6888, 0.6268 and 1.3496, respectively.
The greenback appreciated to a 1-1/2-month high of 147.24 against the yen.
The currency is seen finding resistance around 1.08 against the euro, 1.28 against the pound, 0.90 against the franc, 0.64 against the aussie, 0.60 against the kiwi, 1.38 against the loonie and 149.00 against the yen.
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