- It is expected that the US ISM Services PMIs improve slightly in July.
- The US services sector is expected to remain within the expansion territory.
- Investors continue to favor approximately two feat cuts of the Fed this year.
On Tuesday, the Institute for Supply Management (ISM) will publish its Julio Services PMI, and analysts expect it to rise to 51.5 from June 50.8. That would mark the second consecutive month of growth in the services sector, a sign of its resilience and an impulse to the confidence in the broader economy of the USA.
That said, not all readings were uniformly strong in the previous month. The ISM employment index fell into contraction territory at 47.2, while the index of new orders was recovered to 51.3, indicating a firmer demand for services. In the cost front, the paid price index fell to 67.5 from 68.7, a reminder that the pressure on prices remains persistent.
What to expect from the ISM services PMI report?
Inflation in the US remains higher than the objective of 2.0% of the Fed, keeping those responsible for policy on alert, especially since the total impact of recent tariffs on the broader economy has not yet manifested.
The PCE report last week stressed this point: general inflation rose to 2.6% in June compared to the previous year (increasing from 2.4% in May and above most forecasts), while the underlying PCE, excluding food and energy, remained stubbornly stable in 2.8%.
In this context, a reading of the ISM services that simply meet expectations is unlikely that it moves the US dollar: it would reinforce the feeling of an still resilient economy despite the persistent pressure on prices. But if the services sector softens more than anticipated, it could disturb the markets and bring investors to reduce their exposure to the dollar amid concerns about a loss of economic impulse.
When will the report of the ISM service purchasing managers index and how could it affect the EUR/USD?
The Institute for Supply Management (ISM) will publish the service purchasing managers index (PMI) on Thursday at 14:00 GMT.
According to Pablo Piovano, a senior analyst at FXSTERET, “the resurgence of the sales process could initially drag the EUR/USD to its monthly floor in 1,1391 (August 1), which is located just before the provisional SMA of 100 days in 1,1369. The loss of the latter could put a possible movement towards the weekly minimum movement in 1,1210 (May 29).”
On the other hand, periods of strength could boost the market to challenge the weekly maximum in 1,1788 (July 24) before reaching the 2025 roof of 1,1830 (July 1). Once this region has been overcome, the PAR could embark on a probable movement towards the 1.2000 milestone, “adds Piovano.
Finally, Piovano suggests that, “while it is above the 200 -day SMA of 1,0944, the constructive perspective of the torque should remain unchanged.”
Economic indicator
Non -Manufacturing ISM Employment Index
The non -manufacturing ISM PMI published by ISM It shows the commercial conditions in the non -manufacturing sector of the US, taking into account the expectations of future production, new orders, inventories, employment and deliveries. It is a significant indicator of the general economic condition in the United States. The Non -Manufacturing Employment Index ISM represents business feeling with respect to labor market conditions and is considered a strong indicator prior to non -agricultural payroll. A result greater than 50 is positive (or bullish) for the USD.
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Last publication:
JU JUL 03, 2025 14:00
Frequency:
Monthly
Current:
47.2
Dear:
–
Previous:
50.7
Fountain:
Institute for Supply Management
Why is it important for operators?
GDP – FREQUENTLY QUESTIONS
The gross domestic product (GDP) of a country measures the growth rate of its economy for a certain period of time, normally a quarter. The most reliable figures are those that compare GDP with the previous quarter (for example, the second quarter of 2023 with the first of 2023) or with the same period of the previous year (for example, the second quarter of 2023 with the second of 2022).
The annualized quarterly figures of GDP extrapolate the growth rate of the quarter as if it were constant for the rest of the year. However, they can be misleading if temporary disturbances affect growth in a quarter but it is unlikely that they last all year, as happened in the first quarter of 2020 with the burst of the coronavirus pandemic, when the growth collapsed.
A higher GDP result is usually positive for the currency of a nation, since it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting greater foreign investment. Similarly, when GDP falls it is usually negative for the currency.
When an economy grows, people tend to spend more, which causes inflation. The Central Bank of the country then has to raise interest rates to combat inflation, with the side effect of attracting more world investor capital tickets, which helps the appreciation of the local currency.
When an economy grows and GDP increases, people tend to spend more, which causes inflation. Then, the country’s central bank has to raise interest rates to combat inflation. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in the face of placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for the price of gold.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
