• ISM Services PMI came in slightly below the market expectation in February.
• US Dollar Index turned south and declined toward 103.50 after the data.

Business activity in the US service sector continued to expand in February, albeit at a more moderate pace than in January, with the ISM Services PMI edging lower to 52.6 from 53.4. This reading came in below the market expectation of 53. 

Other details of the report showed that the Prices Paid Index, the inflation component, declined to 58.6 from 64, while the Employment Index fell to 48 from 50.5, reflecting a decrease in the sector's payrolls. 

Assessing the survey's findings, "the slight decrease in the rate of growth in February is a result of faster supplier deliveries and the contraction in the Employment Index," said Anthony Nieves, Chair of the Institute for Supply Management Services Business Survey Committee, and continued:

"The majority of respondents are mostly positive about business conditions. Respondents remain concerned about inflation, employment and ongoing geopolitical conflicts."

Market reaction

The US Dollar (USD) came under bearish pressure with the immediate reaction to the PMI data. At the time of press, the US Dollar Index was down 0.2% on the day at 103.63.