U.S. Dollar Climbs As ISM Services PMI Exceeds Expectations

(RTTNews) - The U.S. dollar strengthened against its major counterparts in the New York session on Wednesday, as ISM non-manufacturing PMI came in higher than expected in August, raising the prospect of higher for longer rate policy by the Federal Reserve.

The ISM said its services PMI rose to 54.5 in August from 52.7 in July, with a reading above 50 indicating growth in the sector. The increase surprised economists, who had expected the index to edge down to 52.5.

Risk sentiment soured as higher crude prices renewed concerns about persistent inflation.

The price of crude oil reached its highest levels since last November on Tuesday after Saudi Arabia and Russia extended supply cuts until the end of the year.

Recent downbeat data out of Europe and China fuelled fears of a slowdown in global growth.

The greenback climbed to multi-month highs of 0.8944 against the franc and 1.2481 against the pound, from its early lows of 0.8881 and 1.2587, respectively. The currency is seen facing resistance around 0.92 against the franc and 1.21 against the pound.

The greenback appreciated to multi-month highs of 1.0702 against the euro and 1.3676 against the loonie, off its early lows of 1.0748 and 1.3622, respectively. The currency may challenge resistance around 1.04 against the euro and 1.38 against the loonie.

The greenback rose to session's highs of 0.6357 against the aussie and 0.5859 against the kiwi, up from its previous lows of 0.6404 and 0.5904, respectively. Next key resistance for the greenback may be located around 0.60 against the aussie and 0.57 against the kiwi.

The greenback rebounded to 147.70 against the yen, heading to pierce its previous nearly 1-year high of 147.81. If the currency rises further, 151.00 is likely seen as its next resistance level.

Looking ahead, the Fed Beige book report will be released in the New York session.