Investing.com - The pound slipped lower against the U.S. dollar on Wednesday, after data showed that U.K. service sector activity contracted for the first time in more than three years and as investors eyed the Bank of England’s policy meeting on Thursday.
GBP/USD hit 1.3287 during European morning trade, the session low; the pair subsequently consolidated at 1.3334, edging down 0.17%.
Cable was likely to find support at 1.3169, the low of August 2 and resistance at 1.3480, the high of July 15.
Research group Markit said its U.K. services purchasing managers’ index dropped to 47.4 last month from a reading of 52.3 in June. It was the lowest level since December 2012.
The weak data added to expectations for a rate cut by the BoE at its policy meeting on Thursday.
Meanwhile, the greenback regained some ground after the Commerce Department said on Tuesday that personal spending increased more than expected, by 0.4% in June, while household spending also climbed 0.4% in May.
The report also showed that personal income rose 0.2%, falling short of forecasts of 0.3% growth.
But sentiment on the dollar remained fragile after Dallas Federal Reserve head Robert Kaplan urged caution on raising U.S. interest rates amid a raft of risks facing the global economy.
Expectations for a U.S. rate hike before the end of year also declined last week’s surprisingly weak U.S. second quarter growth data.
Sterling was steady against the euro, with EUR/GBP at 0.8398.