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Forex - GBP/USD erases gains despite upbeat U.K. PMI

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Investing.com -

Investing.com - The pound erased gains against the U.S. dollar on Tuesday, even after data showed that U.K. service sector activity expanded at the fastest rate in seven months in March as the greenback recovered from Friday's downbeat U.S. employment data.

GBP/USD hit 1.4834 during European morning trade, the pair's lowest since April 3; the pair subsequently consolidated at 1.4838, shedding 0.28%.

Cable was likely to find support at 1.4773, the low of April 2 and resistance at 1.4982, Monday's high.

In a report, market research group Markit said its services purchasing managers index increased to 58.9 last month from a reading of 56.7 in February. Analysts had expected the index to rise to 57.0 in March.

Commenting on the report, Chris Williamson, Chief Economist at survey compilers Markit said, "The three PMI surveys collectively indicate that the economy grew by 0.7% in the first quarter, reviving from the slowdown seen late last year."

The dollar had come under pressure after the Labor Department reported Friday that the U.S. economy added 126,000 new jobs in March, less than half of February's gain and the smallest increase since December 2013.

The report added to doubts over the strength of the economic recovery, prompting investors to push back expectations for a rate hike by the Federal Reserve to the end of the year from midyear.

Sterling was higher against the euro, with EUR/GBP declining 0.52% to 0.7302.

In the euro zone, Markit said the services PMI slipped to 54.2 last month, from 54.3 in February. Analysts had expected the index to remain unchanged.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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