Investing.com - The pound was at the day’s highs against the dollar on Thursday after data showing that activity in the UK service sector accelerated to a four-month high in April.
GBP/USD was up 0.18% at 1.2889 by 09.02 GMT, from around 1.2891 ahead of the release of the data.
Market research group Markit said its services purchasing managers’ index rose to 55.8 in April, up from 55.0 in March. Analysts had expected the index to tick up to 54.5.
Service sector firms enjoyed “a sustained rebound in business activity during April, supported by the fastest upturn in new work so far in 2017,” the report said.
Job creation also hit a four-month high, as companies worked to handle the increased demand.
The report also noted that service sector bosses are confident about growth prospects over the next 12 months.
Markit said that economic growth seems to have accelerated after slowing to 0.3% in the first quarter.
“The upturn in the services PMI rounds off a hat- trick of good news after upside surprises to both the manufacturing and construction PMIs. The three surveys collectively point to GDP growing at a rate of 0.6% at the start of the second quarter,” said Chris Williamson, chief business economist at Markit.
Sterling’s gains were held in check by the broadly stronger dollar after the Federal Reserve indicated that it is still on track for two more interest rate hikes this year.
The Fed concluded its two-day policy meeting Wednesday afternoon, giving a positive assessment of the U.S. economy while keeping rates unchanged, as was widely expected.
The Fed said it expects the economy to rebound after hitting a soft patch in the first three months of the year, noting that the labor market looks solid and inflation is running close to its target.
The hawkish Fed statement indicated that policymakers think the recent weakness in the economy was temporary and that more rate hikes are coming this year.
Sterling was slightly lower against the euro, with EUR/GBP ticking up 0.14% to 0.8471.
In the euro zone, data on Thursday showed that private sector growth rose to the highest level since 2011 last month.
Markit’s composite output index jumped to 56.8 in April, up from 56.4 in March.