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  • US Markit Services PMI continued to rise in July. 
  • US Dollar Index pushes lower toward mid-92.00s after the data.

The IHS Markit’s Services Purchasing Managers’ Index (PMI) for the US improved from 47.9 in June to 50 in July to show that the economic activity in the service sector stabilized. This reading came in better than the previous estimate and the market expectation of 49.6.

Further details of the report revealed that the Composite PMI rose from 47.9 in June to 50.3 in July, pointing out to a modest expansion in the private sector. 

Commenting on the data, “the service sector is showing welcome signs of stabilizing after the unprecedented downturn seen during the second quarter, but many companies continue to struggle with virus-related constraints, especially in states where social distancing restrictions have been tightened again,” said Chris Williamson, Chief Business Economist at the IHS Markit. “Whether this optimism can be sustained and result in faster growth will, of course, depend on infection rates falling.”

Market reaction

The US Dollar Index extended its daily slide after the data and was last seen losing 0.7% on the day at 92.62.