Pound Falls on Weak UK Services PMI Report as Dollar Surges

The Sterling pound today fell against the US dollar as investors reacted to weak service PMI released by Markit Economics in the early London session. The GBP/USD came under intense selling pressure as the greenback pressed higher despite yesterday’s record high US initial jobless claims numbers.
The GBP/USD currency pair today fell from a high of 1.2395 during the late Asian session to a low of 1.2262 in the early European session and was headed lower at the time of writing.
The currency pair today extended yesterday’s slide driven by the risk-off market sentiment as the latest data revealed that coronavirus deaths in the UK were higher than expected. The release of the Markit/CIPS UK Services PMI after the London open drove the pair lower as the March final print came in at 34.5 versus the preliminary estimate of 35.7. The pound was also weighed down by new economic growth estimates from Fitch Ratings indicating that the UK’s GDP could contract by up to 4% this year. Investor sentiment was soured by the fact that the British government is not doing enough to coronavirus deaths in the UK and protect the UK economy.
A surge by the greenback as tracked by the US Dollar Index, which hit a high of 100.74 also contributed to the pair’s decline. The greenback’s status as a safe-haven currency meant that investors kept buying it despite negative US data.
The currency pair’s short-term performance is likely to be affected by the release of the US non-farm payrolls report at 13:00 GMT.
The GBP/USD currency pair was trading at 1.2274 as at 11:07 GMT having fallen from a high of 1.2395. The GBP/JPY currency pair was trading at 133.20 having dropped from a high of 133.92.

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