The dollar is currently rebounding from some early weakness against its major competitors on Monday. Part of the reason for the recovery was the stronger than expected U.S. non-manufacturing data.
Activity in the U.S. service sector grew at a faster rate in the month of July, according to a report released by the Institute for Supply Management on Monday, with the index of activity in the sector rising by much more than economists had anticipated.
The ISM said its non-manufacturing index jumped to 56.0 in July from 52.2 in June, with a reading above 50 indicating growth in the service sector. Economists had been expecting the index to show a more modest increase to a reading of 53.0.
The dollar dipped to a low of $1.3298 against the Euro on Monday, but has since bounced back to around $1.3250.
Euro area investor confidence improved notably in August from a month earlier, a survey by think-tank Sentix revealed Monday, suggesting that the recovery of the 17-nation economy is gaining traction.
The sentix investor confidence index rose to -4.9 in August from -12.6 in July and -11.6 in June. This was also much better than the expected score of -10.
The euro area economy returned to expansion territory in July, as manufacturing output posted a solid growth and the trend in services activity moved close to stabilization, survey from Markit Economics showed Monday.
The final composite output index rose to 50.5 in July, a near two-year high, from 48.7 in June. The flash reading was 50.4.
Similarly, the final services Purchasing Managers’ Index climbed to 49.8 from 48.3 a month ago. The reading was also above the flash estimate of 49.6.
Retail sales in the euro area decreased in June after recovering in the previous month, data released by statistical office Eurostat showed Monday. The rate of contraction matched economists’ forecast. Retail sales declined 0.5 percent month-on-month in June, reversing May’s 1.1 percent increase, which was revised up from 1 percent. The latest outcome was in line with economists’ forecast.
Germany’s service sector activity increased at a faster pace in July, indicating a further improvement in business conditions, but by a lesser degree than initially estimated, latest data showed Monday. Final data from a survey compiled by Markit Economics showed that the seasonally adjusted purchasing managers’ index for the service sector moved up to 51.3 in July from 50.4 in June. The flash estimates were for a higher reading of 52.5.
French private sector activity contracted at a slower pace in July, detailed results of a survey by Markit Economics revealed Monday. The seasonally adjusted final composite output index, which gauges the combined output of manufacturing and service sectors, rose to a 17-month high of 49.1 from 47.4 in June.
Britain’s manufacturers upgraded their forecasts for economic growth this year but warned of significant risks should investment fail to make up ground lost in the last five years.
In its half-year ‘Economic Prospects’ report, manufacturers’ group EEF said the economy will grow 1.1 percent this year, up from the previous forecast of 0.9 percent. Growth is then expected to steadily increase through 2014 to 1.8 percent.
The greenback dropped to a 1-week low of $1.5377 against the pound sterling on Monday, but has since risen back to around $1.5330.
The U.K. service sector expanded at its fastest pace for over six-and-a-half years in July, helped by an increase in new business as market conditions continued to strengthen, results of a closely watched survey revealed Monday.
The headline Business Activity Index climbed to 60.2, the highest reading since December 2006, from 56.9 in June, Markit Economics said. The reading was forecast to rise moderately to 57.3.
The buck extended its losses from the end of the previous week against the Japanese Yen early Monday, falling to Y98.273, but has since climbed to around Y98.615.
Japan’s service sector activity expanded at the weakest pace in nine months in July, a report from Markit Economics revealed Monday. The headline business activity index fell to 50.6 in July from 52.1 in June.