Pound Falls As U.K. Services PMI Hits Near 3-Year Low

Pound Falls As U.K. Services PMI Hits Near 3-Year Low

3 March 2016, 11:22
Roberto Jacobs
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Pound Falls As U.K. Services PMI Hits Near 3-Year Low
03 Maret 2016 5:13 PM


The British pound weakened against the other major currencies in the early European session on Thursday, after data showed that the U.K. service sector activity fell to nearly three-year low in February.

Data from Markit and Chartered Institute of Procurement and Supply showed that the U.K. service sector activity fell to 52.7 in February, from 55.6 in January. This was the slowest rise in service sector activity since March 2013.

The economists had expected the PMI to rise to 55.1 in February.

In other economic news, data from the mortgage lender Halifax showed that the U.K. Halifax house price index rose 9.7 percent year-on-year, the same as in January. Economists had forecast 10.4 percent increase. House price declined 1.4 percent from January, when they rose 1.7 percent. Economists had expected prices to remain unchanged.

Also, house price data from the Nationwide Building Society showed that U.K. house price inflation accelerated to its fastest pace in 10 months in February after easing slightly in the previous month, but the pace was less-than-expected.

The Nationwide house price index rose 4.8 percent year-on-year following 4.4 percent increase in January. Month-on-month, house prices grew 0.3 percent in February, same as in January.

In the Asian trading today, the pound held steady against its major rivals. Subsequently, it rose against its major rivals in the pre-European session.

In the early European trading, the the pound fell to 159.94 against the yen and 1.4032 against the U.S. dollar, from an early 10-day high of 161.01 and a 9-day high of 1.4106, respectively. The pound is likely to find support around 155.00 against the yen and 1.38 against the greenback.

The pound dropped to 0.7745 against the euro and 1.3998 against the franc from early highs of 0.7705 and 1.4075, respectively. If the pound extends its downtrend, it is likely to find support around 0.78 against the euro and 1.37 against the franc.

Looking ahead, Markit's final U.S. services PMI for February, the ISM's U.S. service sector PMI for February, U.S. weekly jobless claims for the week ended February 27 and U.S. factory orders for January are set to be published in the New York session.

At 10:45 am ET, Federal Reserve Bank of Dallas President Robert Kaplan is expected to speak on economic conditions and monetary policy before the University of Texas Investment Management Company 20th Anniversary Event in Austin.

The material has been provided by InstaForex Company - www.instaforex.com


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