U.S. service growth meets forecasts

The service sector in the world's largest economy expanded in line with analysts' expectations, although the pace of growth slowed slightly from the previous month, according to a report released on Tuesday. The Institute for Supply Management's said its non-manufacturing index cooled last month to 55.2, after reaching 10-month high of 55.7 in December. Despite a slowdown, the reading still remains highly above the 50 line, which signals an expansion in the sector. Despite positive data, there were still some signs of weakness, as the new orders index stood at its lowest since April 2012, falling to 54.4 in January from 58.3 the month before. At the same time, the business activity index also dropped, dipping to 56.4, down from 60.8 the month before and hitting its lowest since August 2012.

"I think people are optimistic right now," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. "The view is you want to buy risky assets on good data and ignore the bad data."