Investing.com - The pound fell to session lows on Thursday after data showed that activity in the U.K. service sector slowed more than expected in June, but activity remained robust with new business growth and payrolls increasing.
GBP/USD slipped 0.13% to 1.7143 from around 1.7154 ahead of the release of the data.
Cable was likely to find support at 1.7125 and resistance at 1.7175, Wednesday’s high and the most since October 2008.
The Markit U.K. services purchasing managers’ index slowed to 57.7 in June from 58.6 in May, and below forecasts of 58.3. It was the lowest reading in three months, but remained well above the 50 level separating growth from contraction.
New business volumes rose at the fastest rate in six months and the sector created jobs at a record pace.
The report added to indications that the economy was continuing to grow strongly in the second quarter after the economy expanded at the fastest annual rate since 2007 in the first three months of 2014.
"Alongside an ongoing surge in construction and the largest quarterly rise in manufacturing output for 20 years, the services PMI confirms that the economy is firing on all cylinders," Chris Williamson, Chief Economist at survey compiler Markit said.
“We expect the economy to grow by 0.8% again in the second quarter, taking GDP to a new all-time high,” he added.
Sterling has strengthened broadly since the start of this year, gaining more the 13% against the dollar amid expectations that the deepening U.K. recovery will prompt the Bank of England to raise rates before the end of the year.
Meanwhile, investors were looking ahead to the U.S. report on nonfarm payrolls later Thursday after data on Wednesday showing that the private sector added a larger than forecast 281,000 jobs last month bolstered expectations for a strong increase.
The report was being released one day early ahead of Friday’s Independence Day holiday.
Sterling dipped against the pound, with EUR/GBP edging up to 0.7964, not far from Wednesday’s lows of 0.7958, the weakest since October 2013.
The euro remained under pressure amid concerns that the European Central Bank could voice concerns over the currency’s recent strength at its post-policy meeting press conference later Thursday, as fears over persistently low levels of inflation in the euro zone continued.
The ECB was seen as unlikely to implement fresh monetary policy measures at its meeting after cutting rates to record lows in June.