Pound Falls As U.K. Service Sector Growth Eases To 16-Month Low
05 Febbraio 2018 - 06:31AM
RTTF2
The pound weakened against its major counterparts in early
European deals on Monday, after a data showed that British service
sector activity expanded at the slowest pace in nearly
one-and-a-half years in January.
Survey data from IHS Markit showed that the IHS Markit/Chartered
Institute of Procurement & Supply Purchasing Managers' Index,
dropped more-than-expected to 53.0 in January from 54.2 in
December. It was forecast to fall to 54.0.
However, any reading above 50 indicates expansion in the
sector.
European shares dropped on concerns over higher interest rates
and as coalition negotiations between German Chancellor Angela
Merkel's conservative party and the Social Democrats broke down
over the weekend.
The currency has been trading in a negative territory in the
Asian session, with the exception of the greenback.
The pound eased back to 155.03 against the yen, from a high of
155.55 hit at 5:15 pm ET. This may be compared to a 5-day low of
154.83 hit early in the session. The next possible support for the
pound is seen around the 153.00 level.
Survey by IHS Markit showed that Japan's service sector activity
expanded at a slightly faster pace in January.
The seasonally adjusted services purchasing managers' index, or
PMI, rose to 51.9 in January from 51.1 in December.
The pound resumed its early slide against the franc, falling to
a 6-day low of 1.3111. The pound is seen finding support around the
1.30 level.
The pound gave up some of its early gains against the greenback
with the pair trading at 1.4122. This may be compared to a 6-day
low of 1.4082 hit early in the Asian session. If the pound declines
further, it may target support around the 1.39 region.
The U.K. currency dropped to 0.8837 against the euro, its lowest
since January 19. This follows an advance to 0.8812 at 5:00 pm ET.
On the downside, 0.90 is possibly seen as the next support level
for the pound.
Final data from IHS Markit showed that the euro area economy
expanded at the fastest pace pace since mid-2006 in January.
The final composite output index rose more than initially
estimated to 58.8 in January from 58.1 in December. The flash score
was 58.6.
Looking ahead, U.S. ISM non-manufacturing composite index for
January is set for release in the New York session.
At 11:00 am ET, the European Central Bank President Mario Draghi
will testify on the ECB's Annual Report for 2016 before the
European Parliament in Strasbourg.
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