The Pound weakened against the majority of its most traded peers including the Euro and US Dollar on Wednesday after a report showed that service sector activity in the UK expanded at its slowest pace in seven months.
Markit’s services PMI dropped to 58.3 in January, the lowest-level recorded since June, from the 58.8 figure recorded in December. Economists had been expecting a rise to 59 and could raise uncertainty over the future prospects for the UK economy.
The data added to the pressure dumped onto the Pound from Monday’s worse than expected manufacturing report. Any hint of a slowdown in the UK economy has seen the Pound drop over recent weeks and today is no exception. The losses incurred from the data however are likely to be limited as the report still paints a bright picture for the economy.
“Although the pace of expansion slowed, we must remember that growth was exceptionally strong in previous months, and also that parts of the country saw record rainfall in January. Even with the easing seen in January, the sector is still expanding at a rate that bodes well for another strong GDP reading in the first quarter. Taken together the three PMI surveys are signalling quarterly growth of 0.8%,” said Markit’s Chief Economist, Chris Williamson.
Against the Euro, Sterling fell further away from the 1.21 level after a report showed that the Eurozone’s private sector had its busiest month in over two years in January. Further losses were limited however due to a separate report showing that retail sales in the Euro bloc tumbled unexpectedly in December.
Demand for the US Dollar meanwhile continues to be underpinned as investors remained wary ahead of monetary policy decisions by the Bank of England and the European Central Bank on Thursday, and Friday’s U.S. nonfarm payrolls report.
Current Pound Sterling (GBP) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6275 ,
Pound Sterling,,Euro,1.2041 ,
Pound Sterling,,Australian Dollar,1.8227 ,
Pound Sterling,,Canadian Dollar,1.8005 ,
[/table]
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