Investing.com - The pound fell against the dollar on Tuesday, closing in on 17-month lows after survey data showing that U.K. service sector activity expanded at the slowest pace in 19 months in December.
GBP/USD hit lows of 1.5188, down from 1.5219 ahead of the data and not far from Monday’s lows of 1.5158, the weakest since August 2013.
Research group Markit reported that its services purchasing managers’ index fell to 55.8 from 58.6 in November. It was the weakest reading since May 2013. Economists had expected the index to tick down to 58.5.
On the index, a reading below 50.0 indicates activity is declining, while a reading above that level indicates it is increasing.
New business and overall activity both rose at slower rates last month the report said, while employment growth hit a four-month low.
The report came after recent survey data showed that activity in the U.K. manufacturing and construction sectors slowed in December and added to the view that the Bank of England will keep interest rates on hold for most of 2015.
“The surveys' suggest the economy grew by 0.5% in the fourth quarter, and the loss of momentum towards the year end will no doubt fuel worries that the upturn is too fragile to withstand higher interest rates", Chris Williamson, chief economist at Markit said.
Sterling also hit session lows against the euro, with EUR/GBP at 0.7838, from 0.7832 ahead of the data.
In the euro zone, data on Tuesday showed that private sector activity grew at a slower pace than initially estimated in December, keeping pressure on the European Central Bank to step up measures to combat the threat of deflation in the region.
The Markit composite PMI, which measures activity in the manufacturing and services sectors in the euro area, rose to 51.4 from 51.1 in November, but was below the preliminary estimate of 51.7.
EUR/USD was last at 1.1905, not far from the lows of 1.1851 struck on Monday, the weakest level since February 2006.