Investing.com - Service sector activity in the U.S. grew at a faster rate than expected in October, boosting optimism over the health of the economy and supporting the case for a rate hike in the coming months, industry data showed on Wednesday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose 59.1 last month from 56.9 in September, above forecasts for a reading of 56.5.
The Non-Manufacturing Business Activity Index increased to 63.0, which is 2.8 points higher than the September reading of 60.2.
The New Orders Index registered 62.0, 5.3 points higher than the reading of 56.7 in September.
The Employment Index increased 0.9 points to 59.2 from the September reading of 58.3.
The Prices Index increased 0.7 points from the September reading of 48.4 to 49.1.
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.
According to the NMI, 14 non-manufacturing industries reported growth in October. After the slight cooling off in September, the non-manufacturing sector reflected growth across most of the indexes. Respondents remain mostly positive about business conditions and the overall economy.
EUR/USD was trading at 1.0876 from around 1.0893 ahead of the release of the data, GBP/USD was at 1.5376 from 1.5380 earlier, while USD/JPY was at 121.42 compared to 121.28 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.88, compared to 97.77 ahead of the report.
Meanwhile, U.S. stock markets were down modestly after the open. The Dow 30 shed 0.1%, the S&P 500 dipped 0.2%, while the Nasdaq Composite slumped 0.1%.
Elsewhere, in the commodities market, gold futures traded at $1,114.70 a troy ounce, compared to $1,115.50 ahead of the data, while crude oil traded at $47.47 a barrel from $47.56 earlier.