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US services post slowest growth since 2016

US services post slowest growth since 2016

The services sector trailed the slowdown in manufacturing, as the ISM gauge fell to 53.7 in July, the lowest level in nearly three years.

The ISM non-manufacturing PMI dropped from 55.1 in June, missing forecasts of 55.5.  

Last week, the manufacturing measures recorded its fourth straight slowdown in July, pointing to the weak start of the third quarter.

Both reports support the Fed’s decision last week to cut interest rates by 25 basis points and may suggest further slashes in the coming period.

However, the services PMI strengthened to 53.0 in July from 51.5 in June, resulting in “a moderate expansion in overall business activity,” according to HIS Markit.  

As of 14:17 GMT, the dollar index traded lower at 97.26, extending its slump for a third session in a row, as the escalating trade war added to expectations the Fed would cut interest rates further.

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