Investing.com - The pound fell to fresh 17-month lows against the U.S. dollar on Tuesday, after data showed that U.K. service sector activity expanded at the slowest rate in 19 months in December.
GBP/USD hit 1.5188 during European morning trade, the pair's lowest since August 2013; the pair subsequently consolidated at 1.5200, shedding 0.33%.
Cable was likely to find support at 1.5101 and resistance at 1.5337, Monday's high.
Data showed that the Markit/CIPS Services Purchasing Managers Index decreased to 55.8 last month from a reading of 58.6 in November. Analysts had expected the index to dip to 58.5 in December.
The report came a day after Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index declined to a 17-month low of 57.6 last month from a reading of 59.4 in November. Economists had expected the index to fall to 59.0 in December.
Meanwhile, investors remained cautious amid uncertainty over Greece’s future in the euro zone if far-left anti-austerity party Syriza won elections due to be held later this month.
Demand for the dollar remained broadly supported by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.
The Fed is widely expected to raise interest rates in the coming year as the steady economic recovery in the U.S. continues.
Sterling was also lower against the euro, with EUR/GBP rising 0.19% to 0.7839.
In the euro zone, Markit said the services PMI fell to 51.6 in December from 51.9 in November. Analysts had expected the index to remain unchanged last month.
Markit also said that Germany's services PMI rose to 52.1 last month from a reading of 51.4 in November, while France's services PMI swung into expansion territory in December with a reading of 50.6, up from 49.8 the previous month.