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[August 05, 2014]
Forex - GBP/USD rises to session highs on U.K. services PMI [Jerusalem Post (Israel)]
(Jerusalem Post (Israel) Via Acquire Media NewsEdge) Investing.com Investing.com - The pound rose to session highs against the U.S. dollar on Tuesday, supported by the release of data showing that U.K. service sector activity expanded at the fastest rate since December 2013 in July.
GBP/USD rose 0.15% to 1.6886 from around 1.6849 ahead of the release of the data.
Cable was likely to find support at 1.6814, the low of August 1 and a one-and-a-half month low and support at 1.6955, the high of July 30.
Market research group Markit said the Markit/CIPS Services Purchasing Managers Index jumped to an eight-month high of 59.1 last month from a reading of 57.7 in June. Economists had expected the index to tick up to 57.9.
The report came after data on Monday showed that the expansion in the U.K. construction sector slowed a touch in July, but was still faster-than-expected.
The reports underlined the view that the economic recovery in the U.K. is gaining momentum.
Expectations for a rate hike by the Bank of England before the end of this year were boosted after the bank recently signalled that rates could rise sooner than markets expect if the recovery continues. Still, the BoE was expected to keep rates on hold at the conclusion of its monthly monetary policy review on Thursday.
Meanwhile, the dollar remained supported below recent highs after the latest U.S. employment report on Friday showing that jobs growth slowed slightly in July prompted investors to curtail expectations on the timing of a possible rate hike by the Federal Reserve.
Sterling was higher against the euro, with EUR/GBP shedding 0.31% to 0.7935.
Later in the day, the U.S. was to publish data on factory orders, while the Institute of Supply Management was to release data on service sector growth.
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