Investing.com - Service sector activity in the U.S. grew at the slowest pace in almost two years in February, dampening optimism over the health of the economy and dimming the case for higher interest rates later this year, industry data showed on Thursday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 53.4 last month from 53.5 in January, compared to forecasts for a reading of 53.2.
The Non-Manufacturing Business Activity Index increased to 57.8, 3.9 points higher than the January reading of 53.9. The New Orders Index registered 55.5, 1.0 point lower than the reading of 56.5 in January.
The Employment Index decreased 2.4 points to 49.7 from the January reading of 52.1. The Prices Index decreased 0.9 points from the January reading of 46.4 to 45.5.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
The majority of the respondents' comments continue to be positive about business conditions. The respondents are projecting a slight optimism in regards to the overall economy.
EUR/USD was trading at 1.0934 from around 1.0926 ahead of the release of the data, GBP/USD was at 1.4145 from 1.4130 earlier, while USD/JPY was at 113.52 from 113.53 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.76, compared to 97.81 ahead of the report.
Meanwhile, U.S. stock markets were lower after the open. The Dow 30 shed 0.3%, the S&P 500 dipped 0.4%, while the Nasdaq Composite slumped 0.3%.
Elsewhere, in the commodities market, gold futures traded at $1,251.50 a troy ounce, compared to $1,247.50 ahead of the data, while crude oil traded at $34.36 a barrel from $34.50 earlier.