Investing.com - The pound dropped to a nine-month low against the U.S. dollar on Wednesday, after data showed that U.K. service sector activity expanded at a slower rate than expected in December and as market sentiment remained under pressure.
GBP/USD hit 1.4620 during European morning trade, the pair’s lowest since April 2015; the pair subsequently consolidated at 1.4638, shedding 0.22%.
Cable was likely to find support at 1.4563 and resistance at 1.4725, Tuesday’s high.
Research group Markit said its U.K. services purchasing managers’ index fell to 55.5 last month from a reading of 55.9 in November. Analysts had expected the index to dip to 55.6 in December.
Meanwhile, investors remained cautious after North Korea confirmed on Wednesday that it had conducted a nuclear test and said that it won't give up nuclear capability unless U.S. abandons its hostile foreign policy towards the country.
Markets were also jittey amid growing tensions between Iran and Saudi Arabia, following the execution of a prominent Saudi Shia cleric.
Sterling was steady against the euro, with EUR/GBP at 0.7328.
In the euro zone, Markit said its services PMI rose to 54.2 in December from 53.9 the previous month, compared to expectations for an unchanged reading.