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Forex - GBP/USD gains on surging U.K. service-sector data

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Investing.com - The pound moved higher against the dollar on Monday after a U.K. service-sector index advanced at its fastest pace in more than six years.

Similar data beat market consensus forecasts in the U.S., which gave the greenback some support.

In U.S. trading on Monday, GBP/USD was trading at 1.5352, up 0.40%, up from a session low of 1.5260 and off from a high of 1.5378.

Cable was likely to find support at 1.5260, the earlier low, and resistance at 1.5413, last Monday's high.

London-based Markit Economics reported earlier that the U.K. services purchasing managers' index rose to 60.2 from 56.9 in June, well above economists' expectations for a reading of 57.2.

The data sent the pound gaining against the dollar, which saw support elsewhere on similar data.

The Institute for Supply Management reported earlier that its U.S. non-manufacturing purchasing managers' index rose to 56.0 in July from a three-year low of 52.2 in June.

Analysts had expected the index to inch up to 53.0 last month.

An increase in new orders drove gains, with the new orders component of the index rising to 57.7 from 50.8 in June.

A reading over 50 signifies expansion.

The numbers renewed expectations for the Federal Reserve to begin tapering its stimulus programs later this year, which firmed the dollar, though uncertainty capped gains, as the timing of such tapering remains up in the air, which gave the pound the edge over its U.S. counterpart.

The pound, meanwhile, was up against the euro and down against the yen, with EUR/GBP down 0.56% at 0.8638 and GBP/JPY down 0.09% at 151.18.

On Tuesday, the U.S. will release data on its trade balance, while Federal Reserve Bank of Chicago President Charles Evans is due to speak in public.

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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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