Investing.com - The pound slipped lower against the dollar on Thursday after data showed that the U.K. service sector continued to expand steadily in March, even though the rate of expansion was the slowest in nine months.
GBP/USD touched lows of 1.6597, the lowest since March 27 and was last down 0.15% to 1.6599.
Cable was likely to find support at 1.6600 and resistance at 1.6673, Tuesday’s high.
The Markit/CIPS services purchasing managers index ticked down to 57.6 last month from 58.2 in February. Analysts had expected the index to decline to 58.1.
The index remained well above the 50 level that separates growth from contraction, and signaled another month of robust growth in the sector, which comprises more than three-quarters of the U.K. economy.
Although the rate of new work rose at its weakest rate in 10 months and companies hired fewer employees but business confidence remained firm.
“While March saw growth slow across the services, manufacturing and construction sectors, all three continue to expand at very strong rates, meaning the economy looks to have grown by at least 0.7% again in the first quarter,” Chris Williamson, chief economist at Markit said.
The euro rose to session highs against sterling, with EUR/GBP edging up 0.08% to 0.8288, coming off session lows of 0.8261.
The single currency’s gains looked likely to be held in check ahead of the European Central Bank’s meeting later in the trading day, amid concerns that the bank may take more steps to shore up the recovery in the region.
Recent weak euro zone inflation data has added to pressure on the ECB to take steps to stave off the risk of deflation in the region.
On Wednesday, International Monetary Fund head Christine Lagarde urged the central bank to do more to combat low inflation in the region, warning that slow price growth could undermine the fragile global recovery.
However, most investors expected the ECB to leave monetary policy on hold, after recent comments by ECB officials played down concerns over slowing inflation, indicating that it is temporary.
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