Service sector expands at a stronger pace than expected in December.

Upbeat data helps US Dollar Index pare early losses.

The economic activity in the US service sector expanded at a more robust pace than initially forecasted in December with the IHS Markit's Services PMI improving to 52.8 from 52.2 in the previous estimate and 51.6 in November. This reading also came in better than the market expectation of 52.2.

The US Dollar Index continued to pull away from daily lows on the upbeat data and was last down 0.2% on the day at 96.70.

Commenting on the data, "business activity in the vast service sector picked up pace at the end of last year as rising domestic demand and signs of reviving exports led to higher workloads," noted Chris Williamson, Chief Business Economist at IHS Markit. "Combined with indications of manufacturing lifting out of it’s recent lull, the survey data suggest the overall pace of economic growth accelerated to its fastest since last April."