British pound on session high versus US dollar on strong CIPS data

On Wednesday British pound recorded a session high against the US dollar, as a report stated that services activity in United Kingdom rose at the fastest pace since March 2012 during May.

GBP/USD reached 1.5374, currently session high, during morning European trade, after which consolidation followed at 1.5360. Support was expected at current session low, 1,5290, while resistance was to be met at May 10th high, 1.5456.

Earlier today, it became clear that Services CIPS indicator in United Kingdom rose to 54.9 in May, surpassing projections for a reading of 53.1, while data showed a value of 52.9 during the preceding period. Increase rate was the sharpest since March 2012. New orders contributed to this better result the most, as they increased at a largest rate in the past three years. These strong indicator results came after larger sales volumes, promotions and introduction of new products. Companies hired more employees for the fifth month in a row, while experts projections about future moths were more optimistic.

The data boosted expectations that Bank of England would keep the current course of monetary policy at its monthly meeting on Thursday after stronger than predicted manufacturing and construction data from United Kingdom was released earlier this week.

However, gains against the US dollar were limited, with investors eyeing the upcoming data from United States, concerning ADP Employment Change, Non-Farm Productivity and ISM Non-Manufacturing indicators, scheduled later on Wednesday.

Pound advanced versus the euro as well, as EUR/GBP pair lowered to 0.8507, down by 0.39% for the day.