US: Markit Services PMI (final) drops to 39.8 in March from 49.4

• US Markit Services PMI fell to 39.8 in March from 49.4 in February.
• US Dollar Index continues to cling strong daily gains above 100.50.

The IHS Markit's Services PMI for the US fell to 39.8 (final) in March from 49.4 in February to show that the economic activity in the service sector contracted sharply. However, this reading came in better than the previous estimate and the market expectation of 39.1.

Further details of the report revealed that the Composite PMI fell to 40.9 in March from 49.6.

Commenting on the report, "the survey indicates that the economy contracted an annualised rate approaching 5% in March, but with more measures to fight the virus outbreak being taken this decline will likely be eclipsed by what we see in the second quarter," said Chris Williamson, Chief Business Economist at IHS Markit. "More nonessential businesses are being forced to close, some are going bust, and lockdowns are leading to vastly reduced consumer spending."

Market reaction

The US Dollar Index largely ignored this data and was last see adding 0.65% on the day at 100.75.