The dollar is paring its gains against the Japanese Yen and the British pound Monday afternoon, but is up in comparison to all of its major competitors. The U.S. currency is advancing despite the weaker than anticipated ISM non-manufacturing report this morning.
While the Institute for Supply Management released a report on Monday showing continued growth in the U.S. service sector in the month of September, the index of activity in the sector fell by more than expected.
The ISM said its non-manufacturing index dropped to 56.9 in September from 59.0 in August, although a reading above 50 indicates growth in the service sector. Economists had expected the index to dip to 58.0.
The weak report appears to be reinforcing the belief that the Federal Reserve will hold off on raising interest rates later this month, following the disappointing September jobs report at the end of the prior trading week. However, a rate hike in December remains a possibility.
The dollar slipped to a low of $1.1289 against the Euro Monday morning, but has since climbed to around $1.1175.
Eurozone investor confidence weakened more-than-expected to an eight-month low in October, survey figures from the think tank Sentix revealed Monday. The investor sentiment index fell to 11.7 in October from 13.6 in September. This was the weakest reading since February 2015.
Eurozone retail sales remained flat in August after recovering in the prior month, Eurostat reported Monday. Economists had forecast sales to fall 0.1 percent after rising 0.6 percent in July. The rate for July was revised up from the initial estimate of 0.4 percent.
Eurozone private sector growth slowed more than initially estimated to a four-month low in September, final data from Markit showed Monday. The final composite output index fell to 53.6 in September from 54.3 in August. It was also below the flash score of 53.9.
Germany’s private sector expanded less than initially estimated in September, final data from Markit Economics showed Monday. The final composite output index fell to 54.1 in September from 55 in August. The initial estimate was 54.3.
The French private sector growth improved more than initially estimated in September, final data from Markit Economics showed Monday. The composite output index rose to 51.9 in September from 50.2 in August. It was above the flash score of 51.4 and also the highest in three months.
The buck has risen to around $1.5150 Monday afternoon, from an early low of $1.5244.
British service sector growth unexpectedly slowed for a third consecutive month in September to its lowest level in nearly two-and-a-half years in September, hurt by a slump in new business growth, signaling that economic performance was soft at the end of the third quarter.
The Markit/CIPS UK Services Purchasing Managers’ Index dropped to 53.3 from 55.6 in August, survey results from Markit Economics and the Chartered Institute of Procurement & Supply said Monday. That was in contrast to economists’ expectations for an improvement in the measure to 56.
The greenback has broken out to a 1-week high of Y120.490 against the Japanese Yen, from Friday’s low of Y118.675.
Japan’s service sector growth slowed in September, as output and new orders rose at slower rates, results of a survey by Markit Economics showed Monday. The services purchasing managers’ index, or PMI, dropped to 51.4 in September from August’s 22-month high of 53.7.
Total labor cash earnings in Japan increased for the second straight month in August, but at a slower pace than in the prior month, a preliminary report from the Ministry of Health, Labor and Welfare showed Monday.
Gross earnings grew 0.5 percent year-over-year to JPY 272,382 in August, following a revised 0.9 percent climb in July. Economists had expected a 0.6 percent hike for the month. In June, earnings had fallen 2.5 percent.
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