© Dukascopy Bank SA
|
"The US ISM non- manf number just simply tumbled and there is no other way of saying that. When you see the ISM non-manufacturing number dropping like this, it shakes the floor on which traders are building the hopes that the Fed could increase the interest rate".
- Naeem Aslam, ThinkMarkets
The US service sector expanded at the slowest pace in more than six years, official data revealed on Tuesday. The Institute for Supply Management said that its Non-Manufacturing PMI dropped to 51.4 points in August from the preceding month's 55.5, whereas market analysts anticipated a slight decrease to 55.4 in the reported month. Last month's reading was the weakest since February 2010. Nevertheless, readings above 50 points indicate an expansion in the services sector, and the US service sector grew for 79 consecutive months. Furthermore, the Non-Manufacturing Business Activity Index fell to 51.8, compared to July's reading of 59.3, showing growth for 85 straight months. The New Orders Index declined to 51.4, following the previous month's 60.3. The Employment Index decreased to 50.7 percent from the July reading of 51.4. The Prices Index came in at 51.8 in August, down from the preceding month's reading of 51.9, reflecting growth for the fifth consecutive month. According to the ISM, 11 out of 18 non-manufacturing sectors reported growth last month. After the data release, the EUR/USD pair was seen trading at $1.1213 from around $1.1159 ahead of the release, whereas the GBP/USD pair was at $1.3404 from $1.3367 prior.