USD gets data support as US ISM services PMI beats at 55.4 in August

The US ISM non-manufacturing PMI rose to 55.4 in August from 54.1 in July, comfortably beating the 54.2 consensus and signalling accelerating expansion in the services sector that drives the bulk of US output. The internals were largely constructive: business activity jumped to 61.7 from 59.1 and new orders surged to 60.9 from 57.4, pointing to solid forward demand. The employment index remained in contraction at 47.8, though marginally improved from 47.4, underscoring persistent softness in services hiring ahead of Friday's non-farm payrolls report. Prices paid climbed to 72.6 from 70.3, keeping cost pressures elevated and complicating the disinflation narrative the Federal Reserve is relying on to justify further easing. The mix of firm activity, weak employment and sticky prices leaves the dollar caught between competing forces. For traders, the resilient headline offers near-term support for the greenback against EUR/USD and USD/JPY, but the sub-50 employment gauge keeps downside payroll risk in play.