Pound sterling fell to a two-week low against the dollar Wednesday after a weak UK services sector survey increased the expectation of a large Bank of England interest rate cut later in the week.
The UK purchasing managers' index for the services sector fell to a new record low of 40.1 in November from 42.4 in October, and the lowest score since the index began in 1996, well below expectations for a smaller fall to 41.2.
Weak UK manufacturing and mortgage data also influenced the sterling movements. According to the report an index of manufacturing in the U.K. fell from 40.7 to a record low of 34.4 in November. In the Euro zone, the manufacturing index fell from 41.1 to a record low of 35.6 in November.
But on weekly basis, in the last week, Sterling rose against the U.S. dollar and closed at 1.5382, supports from buoyant stock markets and a report on the UK housing market that was not quite as miserable as economists had feared. Weakness in US dollar due to the weak economic data’s also supported the sterling movements.
Last day in spot trading, sterling closed at 1.477against the dollar, after trading in the range 1.4934-1.466
Weekly Outlook (DGBP:December)
Expecting bullish movements above 155.45.Resistances are 157.55, 160.80, 163.40; Supports are 153.40, 142, 150.80 and 149.80.
Last day DGBP (dec.) traded in the range 153.35 -148.10 and closed at 148.63
