Pound Declines As U.K. Services PMI Falls Unexpectedly
March 04 2015 - 4:10AM
RTTF2
The British pound weakened against the other major currencies in
the early European session on Wednesday, after U.K. service sector
expansion slowed unexpectedly in February.
Data from Markit showed that the Markit/Chartered Institute of
Purchasing and Supply Purchasing Managers' Index for the service
sector decreased to 56.7 in February from 57.2 in January. The
score was forecast to rise to 57.5.
This marked the twenty-sixth month of expansion.
The European Central Bank policy makers are due to meet in
Cyprus for a 2-day monetary policy meeting on Thursday. Traders
focus on the commencement of the bank's quantitative easing
program. The bank will provide further details on its 1 trillion
euro ($1.118 trillion) government bond-buying program, which begins
this month.
In the Asian session, the Pound held steady against the other
major currencies.
In the European trading today, the pound fell to 1.5325 against
the U.S. dollar for the first time since February 17, from an early
high of 1.5371. If the pound extends its downtrend, it is likely to
find support around the 1.51 area.
Against the yen, the pound dropped to a 9-day low of 183.36 from
an early high of 183.98. On the downside, 180.01 is seen as the
next support level for the pound.
The pound fell slightly to 1.4770 against the Swiss franc, from
an early more than a 1-1/2-month high of 1.4794. The pound may test
support near the 1.40 area.
Against the euro, the pound fell slightly to 0.7254 from an
early more than 7-year high of 0.7235. The pound is likely to find
support near the 0.75 region.
Looking ahead, Markit's U.S. PMI, ISM U.S. non-manufacturing PMI
and private sector employment report - all for February are slated
for release in the New York session.
At 9:00 am ET, U.S. Federal Reserve Bank of Chicago President
Charles Evans will deliver a speech about the economic outlook and
monetary policy at the Lake Forest-Lake Bluff Rotary Club 2015
Economic Breakfast in Lake Forest.
Around 45 minutes later, Bank of England's Deputy Governor
Andrew Bailey is expected to speak on currency at Treasury
Committee Hearing, U.K.
The Bank of Canada will announce its interest rate decision at
10:00 am ET. Economists expect the bank to retain interest rates
unchanged at 0.75 percent.
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