GBP/USD off 27-month highs after disappointing UK Services PMI

The sterling edged lower against the US dollar, after the Chartered Institute of Purchasing and Supply (CIPS) announced the results of its survey on services sector activity. The results indicated that activity in the service sector expanded at a slower-than-expected pace in November.

GBP/USD hit a session low at 1.6329 at 09:28 GMT, after which the pair consolidated at 1.6362, slipping 0.18%. The pair was trading at 1.6362 by 10:45 GMT. Support was likely to be received at November 29th low, 1.6315, while resistance was to be met at December 3rd high, 1.6437.

The UK Services Purchasing Managers’ Index (PMI), fell to a reading of 60.0 in November, compared to 62.5 the preceding month, the highest since August 2011. Analysts expected a smaller decline in the index to a reading of 62.0. The Services PMI is published by CIPS and is based on a survey among managers in the services sector and measures the level of activity in the services area. A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction. The indicator is closely watched by traders, because managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

The British Retail Consortium, announced its report earlier today. The report showed that retail prices declined 0.3% from a year ago, after dropping 0.5% in October. The index is based on a survey among 7 500 shops across Great Britain and tracks the percentage change in prices of the 500 mostly traded goods. The BRC index can be seen as a gauge of the broader inflationary/deflationary picture in the UK.

The pound has gained 7.1 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

The benchmark 10-year gilt yield rose two basis points to 2.84 percent after climbing to 2.87% on November 21st, the highest since September 24th, while the 2.25% bonds due in September 2023 declined by 0.195, or 1.95 pounds per 1 000-pound face amount, to 95.005, Bloomberg imparted.

According to Bloomberg World Bond Indexes, gilts handed investors a loss of 3.5% this year through December 3rd.

Meanwhile, ADP Research Institute will probably report later in the day that private sector companies in the United States added 170 000 job positions in November, which would be the fastest pace in five months, according to the median estimate of economists participated in a survey. In October economy managed to add 130 000 jobs.

In addition, the Institute for Supply Management (ISM) is expected to report that its index, gauging activity in the sector of services in the US, slowed down to a reading of 55.0 in November, after it stood at 55.4 in October. The official result is due at 15:00 GMT today.

Elsewhere, AUD/USD fell to a daily low at 0.9033 at 7:15 GMT, also the pair’s lowest point since September 3rd, after which consolidation followed at 0.9036, plunging 1.09% for the day. Support was likely to be received at September 3rd low, 0.8972, while resistance was to be encountered at current session high, 0.9141. AUD/NZD pair fell 0.51% to trade at 1.1033 at 8:09 GMT, or the lowest point since October 2008. is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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