The pound drifted lower against its major rivals in early European deals on Tuesday, as data showed that U.K. service sector activity growth weakened to match the 38-month low registered in April, ahead of the release of the Bank of England’s Financial Stability Report due shortly.
Survey results from Markit showed that the services Purchasing Managers’ Index dropped to 52.3 in June from 53.5 in May. Nonetheless, the score was above the expected level of 52.8.
Traders now await the Bank of England’s bi-annual Financial Stability review followed by a speech from Governor Mark Carney. The report and the accompanying speech is likely to provide more clues about the economy’s outlook after the referendum.
Britian’s ruling Conservative Party has started voting for the selection of their next leader to replace David Cameron as Prime minister after the Brexit vote on June 23 referendum.
The currency has been rading in a negative territory in the previous session, amid rising risk aversion on falling commodities, as well as worries about renewed political uncertainty in the U.K.
The pound fell to a 31-year low of 1.3114 against the dollar and a 11-day low of 133.32 against the yen, compared to Monday’s closing values of 1.3280 and 136.15,respectively. On the downside, the pound is likely to find support around 1.30 against the greenback and 130.00 against the yen.
The pound declined to near a 6-month low of 1.2729 against the franc, while reaching a 2-1/2-year low of 0.8490 against the euro. The pound may locate support around 1.25 against the franc and 0.86 against the euro.
Looking ahead, U.S. factory orders data for May is slated for release in the New York session.
New Zealand’s GDT dairy auction is due to be held at 8:00 am ET.
At 2:30 pm ET, Federal Reserve Bank of New York President William Dudley is expected to speak about the local economy at the Greater Binghamton Chamber of Commerce in New York.
The material has been provided by InstaForex Company – www.instaforex.com