US ISM Services PMI improves to 54.4 in December

Economic activity in the US service sector improved slightly in December, with the ISM Services PMI ticking higher to 54.4 from 52.6 in November, surpassing analysts' expectations.

Further poll results found that the Prices Paid Index—a crucial barometer of inflation—eased to 64.3 from 65.4, while the Employment Index increased to 52.0 from 48.9, indicating a decent pick-up in labour market conditions in the service sector. Finally, the New Orders Index improved to 57.9 from 52.9.

Market reaction

The Greenback remains slightly offered following the release, as investors continue to digest the weaker-than-expected employment data from the ADP report ahead of Friday’s crucial NFP figures. That said, the US Dollar Index (DXY) reverses Tuesday’s gains and revisits the 98.50 region, maintaining the weekly recovery well in place.