The pound weakened and fell to fresh 17-month lows against the U.S. dollar on Tuesday, after data showed that U.K. service sector activity expanded at the slowest rate in 19 months in December.
Data showed that the Markit/CIPS Services Purchasing Managers Index decreased to 55.8 last month from a reading of 58.6 in November. Analysts had expected the index to dip to 58.5 in December.
The report came a day after Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers’ index declined to a 17-month low of 57.6 last month from a reading of 59.4 in November. Economists had expected the index to fall to 59.0 in December.
Demand for the dollar remained broadly supported by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.
Intra-day bias remains bearish as 21 and 55 EMA are crossed southward. SSRC, RSI and MACD oscillator are also showing more bearish momentum is expected.
Tomorrow investors will be focusing on USD FOMC Meeting Minutes, ADP Non-Farm Employment Change and Trade balance.