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Service Sector Report Scores a Goal for Greenback

Andre Lapaine July 5, 2018

The US ISM non-manufacturing index came in over expectations today, providing a little support to a US dollar that’s been struggling to resume its earlier advance in the last several sessions.

The Institute for Supply Management’s service sector index was at 59.1 in June, while market expectations had been for 58.3. June’s reading also represented a gain over the previous month’s 58.6 reading. Business activity/production increased to 63.9 compared to 61.3 in May, and new orders saw a large increase from 60.5 in May to 63.2 for the month of June.

New export orders grew to 60.5 from 57.5, indicating confidence moving forwards for non-manufacturing industries even as trade disputes continue between the US and its major trading partners. The non-manufacturing sector has been on an impressive run, as it has had continued growth for 101 consecutive months now.

Multiple industries, including agriculture, mining and construction have recently been reporting price uncertainty due to escalating trade disputes – though this uncertainty hasn’t had much of a negative impact yet. Domestic demand continues to be strong in 2018, and the recent trade tensions apparently haven’t dampened the expectations for growth moving forward.

Bottom Line: The US service sector looks robust and continues to have positive expectations moving forwards despite trade tensions. Today’s data were a mild positive for the greenback, which has trimmed its overnight losses, but has been struggling to resume its longer-term rally against its major rivals after peaking in late June.

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