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Dollar Mixed After Service Sector Data Disappoints

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The dollar is turning in a mixed performance against its major rivals Monday afternoon. The currency reversed its early gains against the Euro and the pound following the release of the weaker than expected ISM non-manufacturing index.

Activity in the U.S. service sector grew at a slightly slower rate in the month of February, according to a report released by the Institute for Supply Management on Monday.

The ISM said its non-manufacturing index edged down to 59.5 in February from 59.9 in January, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to dip to 59.0.

Traders were also focused on European election results from the past weekend. The prospect of a hung Parliament in Italy looks increasingly likely after nearly half of the votes in Sunday's Italian general election went to populist parties.

Meanwhile, Germany's Social Democratic party voted to join a coalition agreement with Chancellor Angela Merkel.

The dollar climbed to an early high of $1.2268 against the Euro Monday, but has since retreated to around $1.2325.

The Eurozone private sector expanded slightly less than initially estimated in February, final data from IHS Markit showed Monday. The composite output index dropped to 57.1 from January's near 12-year high of 58.8. The flash reading was 57.5.

Eurozone investor confidence weakened sharply in March largely due to the deterioration in Germany, survey data from think tank Sentix showed Monday. The investor sentiment index fell to 24.0 in March from 31.9 in February. The score was forecast to drop moderately to 30.9.

Eurozone retail sales dropped marginally in January, as expected, figures from Eurostat revealed Monday. The volume of retail trade fell slightly by 0.1 percent month-on-month in January, following December's 1 percent decrease. The rate came in line with expectations.

The buck rose to a high of $1.3765 against the pound sterling Monday morning, but has since pulled back to around $1.3835.

British service sector activity expanded at the fastest pace in four months in February on strong upturn in new work, survey data from IHS Markit showed Monday. The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index, rose more-than-expected to 54.5 in February from 53.0 in January. The score was forecast to rise to 53.3.

The greenback slid to an early low of Y105.346 against the Japanese Yen Monday, but has since climbed to around Y106.185.

The services sector in Japan continued to expand in February, albeit at a slightly slower pace, the latest survey from Nikkei showed on Monday with a services OPMI score of 51.7. That's down from 51.9 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

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