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Pound Advances Ahead Of UK Services PMI

August 4, 2014

BRUSSELS (Alliance News) - The pound strengthened against the other major currencies in Asian deals on Tuesday, as traders await the nation's service sector activity for July, due later in the day.

Data from Markit and Chartered Institute of Purchasing and Supply, due at 4:30 am ET, is expected to show UK services PMI to have advanced to 58.00, from 57.7 in June.

Monday's data on construction sector was also positive, with PMI showing an expansion of 62.4 in July. The figure was above the analysts' expectations of 62.0.

The Bank of England is scheduled to announce its interest rate decision on Thursday. Interest rates are expected to be held at historic low of 0.5%. Signs of accelerating recovery have put pressure on the central bank to consider raising its borrowing costs to a more normal level. Economists are speculating the BoE to hike rates first in either late 2014 or early 2015.

The pound advanced to 4-day highs of 173.10 against the yen and 1.5295 against the franc, compared to Monday's closing values of 172.92 and 1.5286, respectively. If the pound extends gain, it may find resistance around 174.00 against the yen and 1.54 against the franc.

The pound, which ended Monday's trading at 0.7957 against the euro and 1.6861 against the greenback, hit 4-day highs of 0.7954 and 1.6870,respectively. On the upside, the pound may find resistance around 0.79 against the euro and 1.695 against the greenback.

Looking ahead, PMIs from major European economies and Eurozone retail sales data for June are due in the European session.

From the US, ISM non-manufacturing composite index for July and US factory orders for June are to be released in the New York session.

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Source: Alliance News

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