Comment: The hot service industry index is expected to promote the longest rising reco

Source: Bloomberg

Author: Robert Fullem

The US dollar trend will rise for the eighth consecutive week, setting the longest rising record since 2005.Traders are paying attention to the service industry data to determine whether the rise will continue.When the data shows that the service industry is expanding and the slow -moving commodity sector, the dollar will often rise.

In the past 10 years, the service industry has ran 2.5 points to win the commodity sector in at least six months, while the US dollar has increased by 4%during this period.The increase in the US dollar fluctuates a lot, as low as 1%as long as Tuesday this year, as of nearly 8%before the top of November 2016.

With the economic recession of the crown disease, the slowdown in trade and the tightening of the Fed's tightening monetary policy leads to commodity activities and price pressure, the service industry has begun to dominate, and the above gap is more obvious.

ADARSH SINHA, co -head of the Bank of America Asia Foreign Exchange and Interest Rate Strategy, said in a weekly outlook report, "Whether it is from the perspective of employment growth, viscous inflation or consumer expenditure, this toughness is mainly promoted by the service industry."Although the U.S. Bank still watched the US dollar before the ISM service industry index was released on Wednesday," we believe that even if it does not constitute sufficient conditions, the service industry has significantly slowed down the continuous depreciation of the US dollar is also a necessary condition. "

The US non -agricultural employment report on Friday shows that the labor market is undergoing controllable cooling.However, foreign exchange traders are paying close attention to the ISM index to obtain more information about the health status of the employment market.Weak data will make the dollar bullish.The indicator was expected to drop from 52.7 to 52.5.Reading higher than 50 indicates expansion.

The strategist at the bank said that the reason why the US dollar appreciated 80%since 2022 may be the policy of the Federal Reserve compared to other regions of the world or China.

Global Service Industry

The performance of the US service industry also affects other regions.Cracks have occurred in China, Europe, Australia, and the United Kingdom. This trend is changing the policy prospects and putting the currency of various economies.

According to the data of the OECD, the service industry has contributed more than two -thirds to the global GDP (GDP). In the developed economy, it has attracted more than three -quarters of foreign direct investment and the number of workers hiredmost.

The RMB fell to the lowest level of nearly two weeks on Tuesday. A folk survey of the previously released in China showed that the expansion speed of the service industry in August was the lowest this year.The poor performance of the European performance industry prompted Morgan Stanley to adjust the policy outlook last week, saying that the Student interest rate of the European Central Bank may have peaked at 3.75%, and it was expected to further raise interest rates before.

Morgan Stanley Jens Eisenschmidt and other economists wrote in a report: "The unexpected decline in the service industry's inflation, plus the upcoming September base effect, and the weak service industry PMI data, which makes people haveFully reasons to believe that the service industry inflation will continue to decline in the next few months. "The concerns about stagnation in Europe have led to many euro multi -headed disarm surrendering.

Japan is an exception. PMI data shows that the service industry expands for the 11th consecutive month, and this sector contributes about 70%of the GDP of the economy.The previously weak employment data caused concerns about the prospects of the Bank of Japan.The service industry PMI data and salary trend released later this month may receive particularly close attention.