The GBP/USD exchange rate recovered some ground on Monday to edge away from a one-month low.
Data out of the US showed that activity in the nation’s services sector held steady at its highest level in 4-1/2 years this month, beating economist forecasts for a slight decline.
The Pound saw little movement due to a lack of market moving domestic data releases.
According to the report released by Markit, its preliminary services Purchasing Managers Index (PMI) came in at 61.0 in July, unchanged from the previous months level and above expectations for a figure of 59.8.
Any figure above 50 indicates expansion whereas one below indicates contraction.
Despite the activity holding at its best level since the survey began back in October 2009 the data also showed that the sector continued to add employees, although at a slower pace.
The employment index dropped to 52.8 from June’s figure of 56.1 which was the fastest rate recorded.
‘While a cyclical upswing appears underway across the service sector, the latest survey provides some indication that a smoother rise is not yet fully entrenched. Nonetheless, service sector companies continue to perform strongly against post recession trends, and overall the latest manufacturing and services PMI surveys suggest that the US economy has enjoyed a strong start to the second half of 2014,’ said Markit’s chief economist, Chris Williamson.
A separate report released by the National Association of Realtors (NAR) showed that pending home sales fell by 1.1% in June, the first decline recorded in four months.
According to the NAR Index the number of pending sales declined to 102.7, down from the revised figure of 103.8 seen in May.
Year on year sales fell from May’s figure of -5.2% to -7.3% this month.
The data suggests that the USA’s housing market is continuing to face headwinds such as the prospect of higher interest rates and stagnant wages of buyers.
Sales are forecast to increase sharply in the second half of the year.
The ‘Greenback’ found some support from the release of the latest Dallas Fed Manufacturing Index. The index increased to 12.7 in July, up from the previous month’s figure of 11.4.
Against the Euro the US Dollar remained trading close to an eight month low as the single currency remained under pressure from last week’s disappointing German data and on concerns over the diverging monetary policy of the European
Central Bank with its peers such as the Federal Reserve and Bank of England.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5885 ,
US Dollar,,Euro,0.7444 ,
US Dollar,,Canadian Dollar,1.0810 ,
US Dollar,,Australian Dollar,1.0630 ,
Pound Sterling,,US Dollar,1.6991 ,
Euro,,US Dollar,1.3437 ,
[/table]
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