• US ISM Services PMI rises unexpectedly in August, to its strongest level since February
• US Dollar Index surges to fresh highs above 105.00.

The economic activity in the US service sector continued to expand in August, for the eighth consecutive month, with the ISM Services PMI rising from 52.7 to 54.5. This reading came in above the market expectation of 52.5.

Further details of the publication revealed that the Employment Index edged higher from 50.7 to 54.7,  while the Prices Paid Index climbed to 58.9 from 56.8,  "indicating a faster rate of increases and a movement from equilibrium."

Commenting on the data, “there has been an increase in the rate of growth for the services sector, reflected by increases in all four subindexes that directly factor into the composite Services PMI and faster supplier deliveries. Sentiment among Business Survey Committee respondents varies by industry; however, the majority of panelists are positive about business and economic conditions there has been a slight pullback in the rate of growth for the services sector."

Market reaction

The US Dollar Index jumped to 105.02, reaching the highest intraday level since March.