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Forex - GBP/USD extends gains after strong U.K. services PMI

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Forexpros - The pound extended gains against the U.S. dollar on Wednesday, after a report showed that activity in the country's services sector grew at its fastest pace in four months in July.

GBP/USD hit 1.6402 during European morning trade, the pair's highest since Monday; the pair subsequently consolidated at 1.6393, gaining 0.59%.

Cable was likely to find support at 1.6223, Tuesday's low and resistance at 1.6474, Tuesday's high and a two-month high.

The Markit/CIPS services purchasing managers' index rose to 55.4 in July from 53.9 in June, confounding expectations for a slowdown to 53.2.

Markit said that taken together with Monday's manufacturing PMI, the data indicated the economy grew by 0.5% in the three months to July, a marked improvement on the 0.2% growth recorded from April to June.

The pound erased losses against the dollar earlier after the Swiss National Bank cut interest rates to curb the franc's gains against the dollar and the euro.

Switzerland's central bank narrowed its three-month Libor rate to 0.25% from 0.75%, saying the currency was "massively overvalued" adding that it "won't tolerate" a "tightening of monetary conditions" and therefore was taking measures against the franc.

Meanwhile, the pound was lower against the euro, with EUR/GBP rising 0.26% to hit 0.8738.

Later in the day, payroll processing firm ADP was publish a report on U.S. non-farm payrolls, while the U.S. Institute of Supply Management was to publish data on service sector growth.

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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.

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