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The dollar rose against the euro, while restoring previously lost ground against the background data for the services sector. The data of the Institute for Supply Management (ISM) non-manufacturing activity were another U.S. report showing that the U.S. economy is recovering steadily. Reported Purchasing Managers Index (PMI) for the non-production sphere of the United States in July rose to 56.0 from 52.2 in June. The July value was the highest since February. According to the forecast of the market, was expected to increase to 53.3. All major sub-indices in June were in the expansion (more than 50). Restrain the growth of the sub-index of employment in the non-manufacturing sector, which was down compared with June. All other sub-indexes rose.
Earlier, the dollar's decline was due to the release of strong data for the euro area. As shown by the final results of studies that were presented to Markit, the index of business activity in the service sector rose slightly last month, but still remained below 50, indicating a contraction in activity. According to the report, the July index of business activity in the services sector climbed to 49.8 points, compared with a preliminary reading at 49.6 and 48.3 in June. It is worth noting that many experts had expected the index to remain unchanged.
In addition, the data showed that an index based on a survey of executives in the manufacturing and services sectors, rose to 50.5 in July from 48.7 in June. This is the first reading above 50 points since January 2012, which was revised from earlier estimate last month at 50.4. The improvement was due to the production, which outweighed the slight reduction in the services sector.
Value of the pound against the dollar has increased significantly, which has helped to publish a report on Britain. According to the data, the July PMI index in the services sector rose to 60.2 from 56.9 in June, reaching its highest level since December 2006. It is worth noting that according to the average estimate of economists, the index had only grow to 57.4 points. We also add that the index is above 50.0 is for seven consecutive months, showing a continuous increase during this period. Last growth was underpinned by the rapid growth in sales volumes, as market conditions continued to strengthen.
Commenting on the latest figures, Paul Smith, senior economist at Markit said that the strong performance in the UK service sector were supported by improvements in the construction and production, and the recovery is gaining momentum, which may point to further growth throughout the summer. In addition, the economist added that despite a substantial increase in the period of one month, the forward-looking elements of the survey point to a further strengthening of the gross domestic product in the third quarter.
The yen rose significantly against the U.S. currency, which was associated with the release of Chinese data. As the results of recent studies, which were presented on Saturday, the China Association of Logistics and Purchasing (Culzean) and the Research Center service industry under the State Statistical Bureau of China, at the end of last month the index of non-manufacturing activity rose slightly, while continuing its expansion.
According to the report, in July, the index of purchasing managers in non-manufacturing sector in the country amounted to 54.1 points, 0.2 percentage points higher than the June figure. Recall that PMI - an indicator showing the level of activity in this case, the non-manufacturing sector. The indicator above 50 indicates growth in the sector, while a drop below this level indicates that there is a reduction.
We also add that PMI PMI in the non-manufacturing sector in the country has increased along with the PMI index in the manufacturing sector, which, according to previously published data, rose to 50.3 points in July from 50.1 points in June.
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