Pound Rises As U.K. Services Growth Rebounds More-Than-Expected

The British pound strengthened against the other major currencies in the early European session on Wednesday, after data showed that U.K. services growth rebounded more-than-expected in March.

Data from IHS Markit and the Chartered Institute of Procurement and Supply showed that the U.K. CIPS Purchasing Managers' Index for the services sector rose to 55.0 in March from February's 5-month low of 53.3. Economists had expected the index increase slightly to 53.4.

Both output and new orders climbed at the sharpest pace in three months. Despite this, the rate of job creation in March was only marginal and the weakest recorded since August 2016.

In the Asian trading today, the pound held steady against its major rivals.

In the European trading, the pound rose to 0.8548 against the euro, from an early 5-day low of 0.8589. The pound may test resistance near the 0.84 region.

Against the U.S. dollar, the yen and the Swiss franc, the pound advanced to 1.2489, 138.27 and 1.2511 from early lows of 1.2423, 137.46 and 1.2450, respectively. If the pound extends its uptrend, it is likely to find resistance around 1.26 140.00 against the greenback, 137.46 against the yen and 1.26 against the franc.

Looking ahead, U.S. ADP private sector jobs data for March, U.S. Markit's services PMI for March and U.S. crude oil inventories data are slated for release in the New York session.

At 8:30 am ET, Bank of England external MPC member Gertjan Vlieghe is expected to speak at Bloomberg, in London.

At 2:00 pm ET, the minutes of the latest Federal Reserve meeting is due to be published.