ISM Services PMI expected to show steady US economic resilience in September

The US services sector is set to remain robust in September, according to forecasts ahead of the Institute for Supply Management’s (ISM) upcoming report. The consensus expects a slight dip in the ISM Services PMI from August’s 55.4 to 55, which would still indicate steady sector resilience and broader economic confidence.

August’s data showed mixed results: hiring momentum improved with the ISM Employment Index rising to 47.8 from 47.4, while New Orders increased to 60.9, suggesting growing demand. However, inflation pressures persisted, with the Prices Paid Index climbing to 72.6.

Analysts note that inflation remains a key concern for the Federal Reserve, as it continues to run above the 2% target. Recent data from the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) showed some easing, but Fed officials remain cautious, keeping the possibility of additional rate hikes on the table.

A PMI reading in line with expectations is unlikely to significantly impact the US Dollar (USD). However, a weaker-than-expected print could shake investor confidence, potentially leading to reduced USD holdings amid fears of slowing growth.

The ISM Services PMI report will be released on Monday at 14:00 GMT. Senior Analyst Pablo Piovano of FXStreet highlights that the near-term outlook for EUR/USD has weakened, with key support levels identified at 1.1064 and further down at 1.1000. A reversal above 1.1515 could signal a shift in momentum.