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Dollar stays supported despite capped gains from strong equities

ING said the euro’s weakness and rising global bond yields are still supporting the dollar, even after ISM services eased to 54.9.

Reported · Written up by our desk · Major Pairs

ING’s Francesco Pesole said the US dollar remains supported early in the week, citing euro-specific weakness and higher global bond yields, while strong equity performance has likely limited further USD gains.

Pesole pointed to ISM services data that eased to 54.9 from 55.4 versus a 55.0 consensus, noting the index stayed in expansion territory even as business activity and new orders softened.

ING said the services report was slightly hawkish, mainly from employment strength and order backlogs, as well as a fresh high in prices paid, but it was not enough to materially shift expectations for an October Federal Reserve hold.

ING’s macro team continues to see a December rate hike as its base case, with the DXY outlook skewed to the upside.

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