Investing.com – The pound extended early gains against the U.S. dollar on Wednesday, surging to an 10-month high after the release of better-than-expected U.K. service PMI data.
GBP/USD hit 1.6125 during European morning trade, the pair‘s highest since January 29; the pair subsequently consolidated at 1.6117, gaining 0.49%.
The pair was likely to find support at 1.5960, Tuesday’s low and resistance at 1.6275, the high of January 28.
Earlier in the day, data showed that the CIPS/Markit U.K. services purchasing manager’s index rose unexpectedly in October to hit a 4-month high.
The services PMI rose to 53.2 in October after rising to 52.8 in September. Analysts had expected the PMI to fall to 52.4 in October. However the report said that rates of growth remained relatively modest and expectations remaind subdued as companies assess the effect of government spending cuts.
Commenting on the report, David Noble, CEO at the Chartered Institute of Purchasing & Supply said, “On the face of it, with a four-month high, October’s services PMI figure looks positive, but real and sustained growth remains subdued. The consequences of government spending cuts are not yet fully realised and business expectations remain historically low.”
The pound was also up against the euro, with EUR/GBP shedding 0.43% to hit 0.8709.
Later Wednesday, the U.S. Federal Reserve was to make its November rate statement. The announcement was widely expected to unveil a fresh round of Treasury bond purchases designed to support the U.S. economic recovery.
GBP/USD hit 1.6125 during European morning trade, the pair‘s highest since January 29; the pair subsequently consolidated at 1.6117, gaining 0.49%.
The pair was likely to find support at 1.5960, Tuesday’s low and resistance at 1.6275, the high of January 28.
Earlier in the day, data showed that the CIPS/Markit U.K. services purchasing manager’s index rose unexpectedly in October to hit a 4-month high.
The services PMI rose to 53.2 in October after rising to 52.8 in September. Analysts had expected the PMI to fall to 52.4 in October. However the report said that rates of growth remained relatively modest and expectations remaind subdued as companies assess the effect of government spending cuts.
Commenting on the report, David Noble, CEO at the Chartered Institute of Purchasing & Supply said, “On the face of it, with a four-month high, October’s services PMI figure looks positive, but real and sustained growth remains subdued. The consequences of government spending cuts are not yet fully realised and business expectations remain historically low.”
The pound was also up against the euro, with EUR/GBP shedding 0.43% to hit 0.8709.
Later Wednesday, the U.S. Federal Reserve was to make its November rate statement. The announcement was widely expected to unveil a fresh round of Treasury bond purchases designed to support the U.S. economic recovery.