Forexpros – The pound held gains against the U.S. dollar on Monday, supported by better-than-expected U.K. service sector data while investors remained hopeful for an agreement to contain the euro zone’s debt crisis later in the week.
GBP/USD hit 1.5664 during European early afternoon trade, the daily high; the pair subsequently consolidated at 1.5645, gaining 0.31%.
Cable was likely to find support at 1.5575, Friday’s low and resistance at 1.5725, Friday’s high.
Earlier in the day, U.K. data showed that service sector activity rose unexpectedly in November, advancing for the eleventh successive month although at a modest pace as incoming new business increased at the slowest rate of the year so far.
The Markit/CIPS Purchasing Managers’ Index for the service sector rose to 52.1 in last month from 51.3 in October, confounding expectations for a dip to 50.5.
Market sentiment was bolstered earlier after Italian Prime Minister Mario Monti unveiled a EUR30 billion package of austerity measures, designed to reduce the second-biggest debt load in the single currency bloc.
Meanwhile, German Chancellor Angela Merkel was to hold talks with French President Nicolas Sarkozy later in the day, to outline proposals for stricter enforcement of euro zone budget discipline, ahead of Friday’s critical European Union summit.
Elsewhere, the pound was slightly lower against the euro, with EUR/GBP easing up 0.10% to hit 0.8595.
Also Monday, the U.S. was to release government data on factory orders, while the Institute of Supply Management was to produce a report on service sector activity.
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