The Pound Sterling advanced to its highest level since October 2008 against the US Dollar on Tuesday after a report showed that the UK’s dominant service sector strengthened unexpectedly in April.
The data showed that service sector activity in the UK advanced again in April. The Chartered Institute of Purchasing & Supply and the NTC Economics showed that UK services PMI climbed by a seasonally adjusted annual rate of 58.7 from 57.6.
Economists had been forecasting for an unchanged figure of 57.6.
Any figure above 50 indicates expansion whereas one below indicates contraction.
The increase means that the British service sector is at its strongest level of the year so far and marks the 16th consecutive month of expansion.
The data also showed that firms hired more staff to deal with increased demand and UK business confidence remains high.
“These service sector numbers are especially important as, due to its sheer size, the sector is providing the main thrust behind the country’s economic recovery this year” said Markit’s chief economist Chris Williamson.
“The April numbers point to the economy growing by at least 0.8% again in the second quarter and, with confidence about the future rising again in April, there’s no end in sight for the current super-strong growth spell.”
“The survey also brings news that private sector employment rose at a record pace in April, signalling 100,000 jobs being created each month.”
Against the Euro Sterling was unable to make significant gains as strong data out of the Eurozone offered support to the single currency.
Data released earlier in the session showed that Europe’s private sector is expanding at its fastest pace in three years. Manufacturing led the way with services following as it advanced by its fastest rate in 34 months.
Later in the session the USA is due to publish its latest balance of trade data.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6939 ,
Pound Sterling,,Euro,1.2164 ,
Pound Sterling,,Australian Dollar,1.8208 ,
Pound Sterling,,New Zealand Dollar,1.9418 ,
US Dollar,,Pound Sterling,0.5906 ,
Euro,, Pound Sterling ,0.8221 ,
Australian Dollar,, Pound Sterling ,0.5491 ,
New Zealand Dollar,,Pound Sterling,0.5150 ,
[/table]
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