Britain’s services sector has stabilized: the PMI for this sector ticked up to 53.9 points. A result of 53.6 was expected. GBP/USD rises within range.
Pound/dollar is now at 1.6060, about 40 pips higher than before the release. Resistance is still far, at 1.6110.
After surprising with strong growth in March, the services sector slowed down significantly in the following months, as seen in the purchasing managers’ indices. This is Britain’s largest and most important sector, so this result is quite encouraging, after so many disappointing figures.
Without strong growth here, there will be no improvement in jobs and a rate hike will remain far in the distance. The 50 point mark separates between growth and contraction.
GBP/USD traded above the round number of 1.60 before the release. Significant support is found at 1.5910, which was a bottom last week. Resistance is found at 1.6110. This line was lost yesterday.
For more on GBP/USD, see the British pound forecast.
Britain’s Monetary Policy Committee, led by BOE Governor Mervyn King, is expected to leave the rates unchanged at 0.5% on Thursday and to continue doing so for another year.Get the 5 most predictable currency pairs