iFOREX Daily Analysis : October 06, 2015

 | Oct 06, 2015 05:04AM ET

The dollar gained against most major currencies on Monday despite weak U.S. service sector data which lowered optimism over the strength of the U.S. economy. The Institute of Supply Management reported on Monday that its non-manufacturing purchasing managers' index fell to 56.9 in September when analysts had expected a drop to 57.5 for last month. The report came after weak U.S. jobs data on Friday underlined fears that a slowdown in global economic growth has spread to the U.S. economy and raised expectations that the initial rate hike by the Federal Reserve will take place in early 2016. The euro also received pressure by research group Markit which said earlier that Germany's services PMI fell to 54.1 in September from 54.3 in August, while France's services PMI rose to 51.9 from 51.2. Markit's services PMI for the entire euro zone fell to 53.7 last month from 54.0 in August. For today, Markets in China are to remain closed for a holiday while Germany is to publish a report on factory orders. Meanwhile, the Euro group of finance ministers are to hold a second day of talks in Brussels. The U.S. and Canada are to report on their respective trade balances.

Later in the day, ECB President Mario Draghi is to speak at an event in Frankfurt.

EUR/USD

The euro posted a slight drop against the dollar on Monday, halting a three-day winning streak, as disappointing service sector from the Eurozone overshadowed recent reports showing weakness in the U.S. economy. Weakness in the U.S. ISM non-manufacturing index failed to give a boost to the pair as it was dragged down by weakness in business activity and new orders. The currency pair traded between a low of 1.1174 and a high of 1.1289 before settling 0.24% lower for the day. For today, Germany is to publish a report on factory orders while the Eurogroup of finance ministers are to hold a second day of talks in Brussels. The U.S. and Canada are to report on their respective trade balances. Later in the day, ECB President Mario Draghi is to speak at an event in Frankfurt.