USD weakens as US Services PMI disappoints at 52.5 vs 52.9 expected

The US dollar retreated across major pairs following the release of disappointing Services PMI data, with the final reading coming in at 52.5 versus the preliminary 52.9 and below the previous month's 54.1. This marks the weakest services sector expansion in approximately 20 months, according to S&P Global's Chief Economist Chris Williamson. The data reveals a broad-based weakening in demand growth, with new business orders showing the smallest rise since early 2024 and manufacturing orders falling for the first time in a year. DXY (Dollar Index) dropped 0.2% to 108.50 following the release, with EUR/USD gaining 25 pips to 1.0325 and GBP/USD advancing to 1.2450. The softer data reinforces expectations that the Federal Reserve may pause its hawkish stance, potentially limiting further dollar strength. Technical indicators suggest immediate support for DXY at 108.30, with resistance at 108.80.