Pound Declines As U.K. Services PMI Falls Unexpectedly

The British pound weakened against the other major currencies in the early European session on Wednesday, after U.K. service sector expansion slowed unexpectedly in February.

Data from Markit showed that the Markit/Chartered Institute of Purchasing and Supply Purchasing Managers' Index for the service sector decreased to 56.7 in February from 57.2 in January. The score was forecast to rise to 57.5.

This marked the twenty-sixth month of expansion.

The European Central Bank policy makers are due to meet in Cyprus for a 2-day monetary policy meeting on Thursday. Traders focus on the commencement of the bank's quantitative easing program. The bank will provide further details on its 1 trillion euro ($1.118 trillion) government bond-buying program, which begins this month.

In the Asian session, the Pound held steady against the other major currencies.

In the European trading today, the pound fell to 1.5325 against the U.S. dollar for the first time since February 17, from an early high of 1.5371. If the pound extends its downtrend, it is likely to find support around the 1.51 area.

Against the yen, the pound dropped to a 9-day low of 183.36 from an early high of 183.98. On the downside, 180.01 is seen as the next support level for the pound.

The pound fell slightly to 1.4770 against the Swiss franc, from an early more than a 1-1/2-month high of 1.4794. The pound may test support near the 1.40 area.

Against the euro, the pound fell slightly to 0.7254 from an early more than 7-year high of 0.7235. The pound is likely to find support near the 0.75 region.

Looking ahead, Markit's U.S. PMI, ISM U.S. non-manufacturing PMI and private sector employment report - all for February are slated for release in the New York session.

At 9:00 am ET, U.S. Federal Reserve Bank of Chicago President Charles Evans will deliver a speech about the economic outlook and monetary policy at the Lake Forest-Lake Bluff Rotary Club 2015 Economic Breakfast in Lake Forest.

Around 45 minutes later, Bank of England's Deputy Governor Andrew Bailey is expected to speak on currency at Treasury Committee Hearing, U.K.

The Bank of Canada will announce its interest rate decision at 10:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.75 percent.