Investing.com - The pound edged higher against the dollar on Wednesday after data showing that activity in the U.K. service sector rebounded last month, but gains were held in check as the dollar remained firm ahead of Friday’s U.S. jobs report.
Markit said the U.K. services purchasing managers index rose to 54.9 in October from September’s 28-month low of 53.3, and ahead of forecasts for a reading of 54.5.
GBP/USD hit highs of 1.5445 following the data, up from around 1.5410 earlier.
The report came after similar surveys of the manufacturing and construction sectors earlier in the week indicated that the rate of economic growth picked up at the start of the fourth quarter.
“The survey data point to GDP rising at a quarterly rate of 0.6% at the start of the fourth quarter, up from 0.5% in the third quarter," Chris Williamson, chief economist at survey compilers Markit said.
Sterling remained higher against the euro, with EUR/GBP down 0.4% at 0.7079.
The single currency remained under pressure after European Central Bank President Mario Draghi indicated Tuesday that the option of further monetary easing was still on the cards.
Draghi said policymakers would re-examine the degree of monetary stimulus already deployed at their December meeting and reiterated that they remained willing and able to act to bolster price growth in the euro area.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.23% to 97.48, boosted by the weaker euro.
Demand for the dollar was also underpinned as investors looked ahead to Fridays U.S. nonfarm payrolls report for indications on the likelihood of a December rate hike.
The Federal Reserve left rates on hold last week but indicated that it could still raise interest rates for the first time since 2006 at its December meeting.
The U.S. was to release data on private sector jobs creation and survey data on service sector activity later Wednesday, as well as trade data for September.
In addition, Fed Chair Janet Yellen was to appear before a congressional committee to answer questions on the U.S. central bank’s plans for bank regulation.