UK Services Had an Olympic August – GBP/USD Capped by

The British services sector grew very nicely according to Markit’s Services PMI. The index hit 53.7 points, the highest since March and above expectations of 51.3 points. July’s figure was 51.

GBP/USD made yet another move on 1.5910, but failed to break this level. This is a very tight cap below the round 1.60 level.

Due to an error, the data was released much earlier than scheduled – around 16 hours ahead of time. Among the three PMIs, services was the only one that posted growth (more than 50 points). Construction disappointed with a drop to contraction (49 points).

Manufacturing exceeded expectations, but still remained on negative ground. It’s important to remember that services is the largest sector. Could Britain’s recession be close to an end?

On the other hand, the figure were for the month of August, when most of London’s Olympic Games were held, and when the Paralympics began.

GBP/USD leaped to 1.5909 upon the surprising publication, but couldn’t run through this line, that was also seen earlier in the day. Support is found at around 1.5850.

For more on cable, see the GBP/USD forecast.

No change is expected at Thursday’s rate decision.