U.S. Service Sector Accelerates in February, Dollar Under Pressure

The U.S. service sector demonstrated robust growth in February, according to the latest report from the Institute for Supply Management (ISM). The ISM Services PMI climbed to 53.5, exceeding both January’s reading of 52.8 and analysts’ forecasts of 52.6. This indicates a notable acceleration in the sector’s expansion.

Digging deeper into the report, key indicators revealed further insights into the sector’s health. The Prices Paid Index, a measure of inflationary pressures, rose to 62.6, signaling increased costs for service providers. Additionally, the Employment Index improved to 53.9, reflecting stronger job growth within the sector. These figures point to an economy that is growing, but also one that is dealing with rising price pressures.

However, despite these positive economic signals, the U.S. dollar faced significant selling pressure. The U.S. Dollar Index experienced a sharp decline, dropping 0.9% to 104.55. This divergence between strong economic data and a weakening dollar highlights the complex interplay of factors influencing currency markets.