Dollar near multi-week highs

8 January 2026

Dollar Near Multi-Week Highs on Strong ISM Services Data

Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

The US dollar traded near multi-week highs on Thursday, supported by stronger-than-expected ISM Services data that helped offset concerns triggered earlier in the week by weak manufacturing figures. The ISM Services PMI rose well above expectations of 52.3 points. The report signaled the strongest expansion in the services sector since October 2024, with all subcomponents back in expansion territory for the first time since February. Notably, the employment index rebounded to 52 from 48.9, easing fears of a sharper labour market slowdown.

These figures have reinforced the view that the US economy remains resilient, favoring expectations of a slightly less dovish stance from the Federal Reserve. As a result, the dollar found support alongside treasury yields. For now, markets continue to expect the Fed to keep interest rates unchanged at its January meeting.

However, gains could be capped by new labour market data. Attention now turns to today’s initial jobless claims, expected to rise to 210,000 from 199,000 previously. However, the key focus will be Friday’s nonfarm payrolls report, where job growth is forecast to slow to around 60,000 from 64,000. Any surprise in either direction could trigger volatility in both currency and bond markets, with weaker data likely to pressure the dollar and yields to the downside.