British Pound Consolidates after Weak Services Sector Report

The British Pound is trading lower against the Dollar afterbetter-than-expected U.S.economic reports regarding private payrolls and ISM manufacturing. The positivenature of both upbeat reports dampened worries about the U.S. economy’sgrowth.

The British Pound is trading lower against the Dollar afterbetter-than-expected U.S.economic reports regarding private payrolls and ISM manufacturing. The positivenature of both upbeat reports dampened worries about the U.S. economy’s growth.

The Sterlingreceived its initial pressure after July services PMI posted an unexpecteddecline. The weakness in this number raised some concerns that the economy maybe cooling down. Despite a recent rise in second quarter GDP and relativelyhigh inflation, investors are still worried the new austerity measures combinedwith higher taxes will cool down the economy.

Along with the Sterling,the Euro was also down for the first day in close to a week. The weaker tonewas set in the Euro following a worse-than-expected final July services PMIreading for the Euro Zone. The services purchasing managers index for the EZrose slightly to 55.8, but fell short of a preliminary reading of 56.0.

In addition to the bearish economic reports, tradersmay be shedding Euros and Pounds ahead of tomorrow’s Bank of England andEuropean Central Bank policy meetings on August 5. Both central banks areexpected to keep interest rates unchanged at historically low levels. The BoEis going to address the effects of the new austerity measures and tax hikes onmonetary policy and ECB President Trichet will discuss the surprise strength inthe Euro Zone economy.