A Hot ISM Services Number Will Set the Dollar Up for More Gains
- August data Wednesday seen as risk for greenback, BofA says
- Euro sinks to almost 3-month low as PMI data shows contraction
Strategists at the bank say 80% of dollar appreciation since the beginning of 2022 can be attributed to either the Fed’s policy relative to the rest of the world or China.
Photographer: Dimas Ardian/The dollar is on pace to climb for an eighth straight week, the longest streak since 2005. Traders are looking to services sector data for the gains to continue, with the greenback tending to climb when the report shows expansion and outperforms a slowing goods sector.
Services have outperformed the goods sector by a 2.5-point margin over at least six months four times over the past 10 years, and in each of those times the dollar has gained an average of 4%. The currency’s advances have ranged from a modest 1% this year through Tuesday to almost 8% in the period ending November 2016 before peaking.