US Services PMI Edges Down to 55.5

The US services PMI for the month of July declined from 55.5 from 56.5 in the preceding month, the Institute of Supply Management (ISM) reported on Wednesday.

Gauge of business activity held firm at 59.3 from 59.5, making it 84^th consecutive monthly increase.

A total of 15 of the industries reported expansion, while 3 contracted in July. New orders reportedly rose from 59.9 in May to 60.3 in July.

Supplier deliveries slowed to 51.0 from 54.0 in May, although there was a slight decrease in inventories, overall stocks were still too high.

There was a decline in the employment index to 51.4 from 52.7 previously as companies looked to support profit margins, while the price paid component declined to 51.9 from 55.5 previously as energy costs edged lower over the month.

According to the ISM, a non-manufacturing reading of 55.5 corresponds to an annualised GDP growth rate of around 2.6%.

The dollar surged higher after the release with EUR/USD touching 1.1170 from 1.1185, while there was some selling in Treasuries with 10-year futures back to unchanged on the day. Equities responded favourably with major US services indices moving into positive territory.