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GBP/USD on session highs after UK Services CIPS

OB-WN555_pound0_G_20130301063433British pound soared to session highs against the US dollar on Monday, after the Chartered Institute of Purchasing and Supply (CIPS) said that activity in UK sector of services rose at the fastest pace since December 2006 in July.

GBP/USD hit a session high at 1.5365 at 8:38 GMT, the highest point since July 29th, after which consolidation followed at 1.5350. Support was expected at the current session low, 1.5257, while resistance was to be met at July 29th high, 1.5412.

Today Markit economics and the Chartered Institute of Purchasing and Supply reported that Services PMI in the United Kingdom hit a reading of 60.2 in July, as that was the highest pace for 6.5 years, exceeding preliminary estimates of a value of 57.3, while in June the indicator came in at 56.9. The index remained above the key level of 50.0 for the seventh consecutive month, accelerating its rate of improvement. These good results were due to the higher value of the index, gauging new orders.

Another report last week stated that UK manufacturing sector expanded at the fastest pace in 2.5 years in the month of July, signaling that economy was gaining strength.

Meanwhile, the greenback was put under pressure, following Fridays report on US non-farm payrolls, which showed weaker than projected results, dimming expectations that the Federal Reserve Bank will begin to taper its asset purchases soon.

Elsewhere, the pound was trading higher against the euro, as EUR/GBP cross dropped by 0.43% to 0.8654 at 9:17 GMT. GBP/JPY, on the other hand, was little changed, dipping 0.06% to 151.07 at 9:21 GMT.

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