Investing.com - The pound held gains against the U.S. dollar on Tuesday, as strong U.K. service sector data continued to support demand for sterling, although a positive economic report out of the U.S. lent some support to the greenback.
GBP/USD hit 1.6063 during U.S. morning trade, the pair's highest since October 31; the pair subsequently consolidated at 1.6030, rising 0.37%.
Cable was likely to find support at 1.5909, the low of November 1 and resistance at 1.6144, the high of October 29.
Sterling strengthened broadly earlier, after data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October.
Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8.
In the U.S., the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 55.4 in October from a reading of 54.4 in September.
Analysts had expected the index to decline to 54.0 last month.
But sentiment on the dollar remained vulnerable as comments by Fed officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.
Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment."
Sterling was also higher against the euro with EUR/GBP declining 0.80%, to hit 0.8395.
The euro remained under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the European Central Bank might cut rates in order to safeguard the economic recovery in the region.
While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.
The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.
The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.
Earlier Tuesday, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline.
GBP/USD hit 1.6063 during U.S. morning trade, the pair's highest since October 31; the pair subsequently consolidated at 1.6030, rising 0.37%.
Cable was likely to find support at 1.5909, the low of November 1 and resistance at 1.6144, the high of October 29.
Sterling strengthened broadly earlier, after data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October.
Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8.
In the U.S., the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 55.4 in October from a reading of 54.4 in September.
Analysts had expected the index to decline to 54.0 last month.
But sentiment on the dollar remained vulnerable as comments by Fed officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.
Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment."
Sterling was also higher against the euro with EUR/GBP declining 0.80%, to hit 0.8395.
The euro remained under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the European Central Bank might cut rates in order to safeguard the economic recovery in the region.
While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.
The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.
The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.
Earlier Tuesday, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline.