Investing.com - The pound held steady against the dollar on Thursday despite data showing that U.K. service sector output grew at the slowest rate in over three years in April, adding to fears that the economy is losing momentum.
GBP/USD was last at 1.4506 from around 1.4477 ahead of the data.
The Markit U.K. services purchasing managers’ index fell to 52.3 in April from 53.7 the previous month.
It was the lowest level since February 2013 and was below economists’ expectations for a reading of 53.5.
The service sector was hit by uncertainty over the European Union membership referendum on June 23, which delayed new orders and by the introduction of the new living wage which has added to cost increases for employers.
The report came after similar surveys of the manufacturing and construction sectors earlier in the week pointed to slowing growth at the start of the second quarter.
The rate of job creation across the three sectors slowed to the weakest for two-and-a-half years, the report said.
“The deterioration in April pushes the surveys into territory which has in the past seen the Bank of England start to worry about the need to revive growth, either by cutting interest rates or through non-standard measures such as QE,” Chris Williamson, chief economist at Markit said.
Elsewhere, sterling was higher against the broadly weaker euro, with EUR/GBP down 0.48% at 0.7883.
The euro was also lower against the dollar, with EUR/USD down 0.27% to 1.1454, pulling away from Tuesday’s highs of 1.1615, the highest level since August.
The dollar remained supported after upbeat U.S. economic reports eased worries about lackluster first quarter growth.
Data on Wednesday showing that the U.S. trade deficit narrowed more than expected in March was seen as likely to boost up the government’s revisions to first quarter growth.
Another report showed that the Institute of Supply Management’s non-manufacturing index rose to its highest level since December last month.
The reports offset data showing that U.S. private sector hiring grew at the slowest rate in three years in April.
The reports come ahead of the U.S. government’s nonfarm payrolls report on Friday, which is expected to show that the economy added 202,000 jobs last month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.23% to 93.48.
The index had hit a low of 91.89 on Tuesday, the weakest level since January 2015.