Pound Drops As UK Services Growth Slows To 2-1/2-year Low
04 Febrero 2019 - 11:28PM
RTTF2
The pound lost ground against its major counterparts in early
European deals on Tuesday, as UK service sector growth slowed
more-than-expected in January, moving closer to stagnation, as new
orders decreased for the first time in two-an-a-half years.
Preliminary data from IHS Markit showed that the CIPS Services
Purchasing Managers' Index, or PMI, dropped to 50.1 from 51.2 in
December. Economists had forecast a score of 51.
A PMI reading above 50 signals growth in the sector.
The latest reading was the lowest for two-and-a-half years and
the second-weakest since December 2012, IHS Markit said.
The composite PMI, which combines manufacturing, services and
construction, fell to 50.3 in January from 51.5 in December.
Economists had forecast a score of 51.5.
The currency was trading mixed against its major counterparts in
the Asian session. While it dropped against the euro and the yen,
it held steady against the greenback and the franc.
Meanwhile, European shares rose with hopes for progress in
U.S.-China trade talks and expectations for a pause in the Fed's
rate hike cycle helping underpin sentiment.
The pound fell to 1.3014 against the greenback, its weakest
since January 24. The next possible support for the pound is seen
around the 1.28 level.
The pound weakened to 143.13 against the yen, from a high of
143.56 hit at 4:25 am ET. The pound is poised to target support
around the 141.00 level.
The latest survey from Nikkei showed that Japan services sector
continued to expand in December, and at a stronger pace, with a
services PMI score of 51.6.
That's up from 51.0 in November and it moves farther above the
boom-or-bust line of 50 that separates expansion from
contraction.
The U.K. currency pared gains to 1.3012 against the franc,
following a high of 1.3049 touched at 4:25 am ET. If the pound
drops further, 1.29 is likely seen as its next support level.
The pound dropped back to 0.8777 against the euro, a pip short
of a 4-day low of 0.8778 seen at 6:45 pm ET. On the downside, the
pound may locate support around the 0.89 region.
Looking ahead, U.S. ISM non-manufacturing composite index for
January is scheduled for release in the New York session.
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