Investing.com - The pound was little changed against the dollar on Wednesday after data showed that growth in the U.K. service sector jumped to an eight-month high in April, as investors remained on the sidelines ahead of Thursday’s parliamentary elections.
GBP/USD was last at 1.5189, up slightly from around 1.5160 ahead of the data.
Research firm Markit said the services purchasing managers’ index rose to 59.5 in April from 58.9 in March. Economists had forecast a decline to 58.5.
A reading below 50.0 indicates activity is declining, while a reading above that level implies it is increasing.
The robust data eased concerns over an economic slowdown after recent similar surveys showed that growth in both the manufacturing and construction sectors slowed sharply in April and another report showed that the U.K. economy expanded just 0.3% in the first quarter.
The report noted that prices charged by service sector firms fell for the first time in six months and were at their lowest in more than three years, reducing the chances of a rate hike by the Bank of England this year.
Investors remained wary ahead of Thursday’s elections which were widely expected to result in a hung parliament and an unstable coalition government.
Elsewhere sterling was lower against the euro, with EUR/GBP up 0.28% to 0.7385.
The single currency was boosted as German 10-Year bund yields rose to their highest level this year, narrowing the gap with their U.S. counterparts.
The euro was also boosted after data showed that euro zone private sector activity remained solid in April, indicating that the recovery in the region is gaining traction.
The euro area final composite PMI came in at 53.9 in April, up from a preliminary reading of 53.5 and just below March's 11-month high of 54.0.
A separate report showed that euro zone retails sales fell 0.8% in March, worse than forecasts for a 0.7% decline.
The dollar remained under pressure after the latest U.S. trade data indicated that the economy may have contracted in the first quarter.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.30% to 94.97, not far from the two-month low of 94.47 set last Thursday.
Investors were looking ahead to the ADP report on private sector jobs growth later in the day ahead of Friday’s government report, as well as a speech by Federal Reserve Chair Janet Yellen, which would be closely watched for any indications on the timing of the first hike in interest rates.