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Forex - GBP/USD lower as weak U.K. PMI damps rate hike hopes

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Forex Pros - The pound was down against the U.S. dollar on Thursday, after worse-than-expected data on U.K. service sector activity dampened expectations for a an interest rate hike by the Bank of England in the coming months.

GBP/USD hit 1.6256 during European late afternoon trade, the daily low; the pair subsequently consolidated at 1.6277, shedding 0.29%.

Cable was likely to find short-term support at 1.6213, Wednesday's low and resistance at 1.6343, Wednesday's high and a 13-month high.

Earlier in the day, data showed that growth in the U.K. service sector slowed sharply in February after January's weather-related rebound, as companies recorded job losses for the fifth month running.

The Markit/CIPS services purchasing managers index fell to 52.6 from January's eight-month high of 54.5, outstripping expectations for a decline to 53.5.

The report contrasted with surprisingly strong data for manufacturing and construction earlier in the week.

A manufacturing PMI survey on Tuesday showed growth held at a record high in February, while data on Wednesday showed construction activity grew at its fastest pace in eight months.

The pound was also down against the euro, with EUR/GBP soaring 0.86% to hit 0.8565.

Also Thursday, a government report showed that U.S. jobless claims fell to a two-and-a-half-year low last week.

The U.S. Department of Labor said the number of people claiming initial jobless benefits in the week ending February 26 unexpectedly dropped to a seasonally adjusted 368K, confounding expectations for an increase to 400K.

A separate report showed that service sector activity in the U.S. grew in line with expectations in February, expanding for the 15th consecutive month.

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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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