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Forex - GBP/USD trims gains after U.K. services PMI disappoints

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Investing.com -

Investing.com - The pound trimmed gains against the U.S. dollar on Monday, after data showed that service sector activity in the U.K. expanded at a slower rate than expected last month, dampening optimism over the strength of the economy.

GBP/USD pulled back from 1.5244, the pair's highest since September 25, to hit 1.5183 during European morning trade, steady for the day.

Cable was likely to find support at 1.5123, Friday's low and resistance at 1.5261, the high of September 25.

Research group Markit said its U.K. services purchasing managers' index fell to 53.3 in September from a reading of 55.6 the previous month. Analysts had expected the index to rise to 56.0 last month.

But demand for the dollar remained under pressure after the Labor Department reported on Friday that the U.S. economy added just 142,000 jobs last month, well below expectations of the 203,000 expected by economists.

August's reading was revised down to 135,000, from the initial reported figure of 173,000.

Average hourly earnings were flat month-on-month and the labor force participation rate fell to just 62.4%, down from 62.6% in August. The unemployment rate was unchanged at 5.1%, in line with forecasts.

The report underlined fears that a slowdown in global economic growth has spread to the U.S. economy and prompted investors to push back expectations on the timing of an initial rate hike by the Federal Reserve to early 2016.

Sterling was lower against the euro, with EUR/GBP gaining 0.42% to 0.7412.

In the euro zone, Markit earlier reported that Germany's services PMI slipped to 54.1 in September from 54.3 in August, while France's services PMI ticked up to 51.9 from 51.2.

Markit's services PMI for the entire euro zone fell to 53.7 last month from 54.0 in August.

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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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