Investing.com - The pound edged higher against the U.S. dollar on Wednesday, easing off a five-month trough as data showing that the U.K. service sector expanded at the fastest rate since November last month lent support to sterling.
GBP/USD hit 1.6489 during European morning trade, the session high; the pair subsequently consolidated at 1.6488, adding 0.12%.
Cable was likely to find support at 1.6446, the session low and resistance at 1.6615, Tuesday's high.
Market research group Markit said the seasonally adjusted Markit/CIPS Services Purchasing Managers Index rose to 60.5 last month from a reading of 59.1 in July. Analysts had expected the index to decline to 58.5 in August.
The data came a day after data showed that activity in the U.K. construction sector expanded at the fastest rate since January last month.
The pound had come under broad selling pressure on Tuesday after a poll showed the Yes to Independence camp gaining ground in the Scottish referendum battle.
Meanwhile, demand for the dollar remained supported after strong U.S. factory data on Tuesday added to the view that the economic recovery is gaining momentum.
Sterling was little changed against the euro, with EUR/GBP inching up 0.03% to 0.7975.
Also Wednesday, Markit said the German services PMI fell to 54.9 last month, from 56.4 in July, while France's services PMI fell to 50.3 in August, from 51.1 the previous month.
For the entire euro zone, Markit reported that the services PMI fell to 53.1 last month, from 53.5 in July. Analysts had expected the index to remain unchanged.
The euro came under broad selling pressure recently amid mounting expectations that the European Central Bank will announce quantitative easing measures as a way to shore up growth after the annual rate of euro area inflation slowed to a five year low last month.