The latest purchasing managers' index from Markit showed the services sector saw its biggest slowdown in almost four years in May.
Sterling fell by about a cent against the dollar before recovering slightly to $1.5292.
On the stock market, the FTSE 100 index was up 21.06 points at 6,949.33.
Supermarket shares were higher after a survey suggested that deflationary pressures on food prices were beginning to ease.
Morrisons shares rose 2.6% while Sainsbury's was 2% higher.
After rising in early trade, shares in Dixons Carphone went into reverse and were down 1.6%. The decline came despite the retailer saying its full-year profits were set to be slightly higher than previously forecast.
Shares in WH Smith rose 4.7% after it reported flat like-for-like sales in the three months to 30 May.
Like-for-like sales at its travel stores rose 4%, but fell 4% at WH Smith's High Street stores.
Shares in Royal Mail rose 0.4% to 526p. The company announced on Wednesday that Peter Long, joint chief executive of travel firm TUI, would be its next chairman.
