Pound Strengthens After U.K. Services PMI Hits 4-Month High
05 Marzo 2018 - 7:33AM
RTTF2
The pound advanced against its major counterparts in the
European session on Monday, as British service sector activity
expanded at the fastest pace in four months in February.
Survey data from IHS Markit showed that U.K. services PMI beat
expectations in February, driven by the sharpest rise in new work
since May 2017.
The IHS Markit/Chartered Institute of Procurement & Supply
Purchasing Managers' Index, rose to 54.5 in February from 53.0 in
January.
Any reading above 50 indicates expansion in the sector.
Rising European stocks also supported the currency.
Investors digested the results of Sunday's Italian elections and
the Social Democratic party's vote for a coalition agreement with
Angela Merkel in Germany.
The pound showed mixed performance against its major rivals in
the Asian session. While it fell against the greenback and the yen,
it held steady against the franc. Against the euro, it rose.
The pound firmed to a 5-day high of 1.3835 against the
greenback, from a low of 1.3767 hit at 3:00 am ET. The pound is
seen finding resistance around the 1.40 mark.
The pound reversed from an early low of 145.08 against the yen,
rising to 146.14. On the upside, 148.00 is seen as the next
resistance level for the pound.
Survey from Nikkei showed that Japan services sector continued
to expand in February, albeit at a slightly slower pace, with a
services PMI score of 51.7.
That's down from 51.9 in January, although it remains above the
boom-or-bust line of 50 that separates expansion from
contraction.
The pound edged up to 1.2953 against the Swiss franc, reversing
from a low of 1.2898 seen at 4:15 am ET. If the pound rises
further, it may find resistance around the 1.31 mark.
Having fallen to 0.8950 against the euro at 5:00 pm ET, the
pound reversed direction and advanced to 0.8904. The pound is
poised to target resistance around the 0.88 area.
Final data from IHS Markit showed that the Eurozone private
sector expanded slightly less than initially estimated in
February.
The composite output index dropped to 57.1 from January's near
12-year high of 58.8. The flash reading was 57.5. Looking ahead,
Markit's U.S. services PMI and ISM non-manufacturing composite
index for February are scheduled for release in the New York
session.
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