USD weakens as Services PMI misses at 52.5, signals slower growth

The US dollar retreated across major pairs following January's S&P Global Services PMI reading of 52.5, missing the 52.8 forecast. The data signals annualized GDP growth of just 1.5% for December and January, raising concerns about first-quarter economic momentum. Manufacturing and services sectors both show subdued new business growth, while employment remains near stagnant, reflecting business hesitation amid uncertainty and elevated costs. The disappointing PMI compounds recent weak economic indicators, suggesting the Federal Reserve may need to reassess its hawkish stance. Technical analysis shows the Dollar Index breaking below 108.00 support, with further downside potential toward 107.50 if economic weakness persists. Traders should monitor upcoming GDP and employment data for confirmation of this slowdown trend, which could accelerate dollar selling pressure.