Investing.com - The pound was little changed against the U.S. dollar on Friday, even after data showed that the U.K. service sector expanded at a faster rate than expected in May, as investors remained cautious ahead of a key U.S. employment report due later in the day.
GBP/USD hit 1.447 during European morning trade, the session high; the pair subsequently consolidated at 1.4425.
Cable was likely to find support at 1.4329, the low of May 16 and resistance at 1.4507, the high of June 1.
Research group Markit said its U.K. services purchasing managers’ index rose to 53.5 last month from a reading of 52.3 in April. Analysts had expected the index to rise to 52.5 in April.
Despite the better than expected read, Markit warned that the improvement in expectations would hinge on the June 23 referendum on the U.K.’s membership in the European Union.
The research group also highlighted that it was the slowest gain in new business in the 41-month growth sequence and that hiring was at a 33-month low.
Market participants were eyeing the release of the U.S. nonfarm payrolls report later Friday for further indications on the strength of the job market. A better-than-expected report would boost expectations for a rate hike this summer by the Federal Reserve.
On Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 1,000 to 267,000 last week. Analysts expected jobless claims to rise by 2,000 to 270,000 from the previous week’s 268,000.
The report came after payroll processing firm ADP said non-farm private employment rose by 173,000 in May, just below expectations for an increase of 175,000 but improving from 166,000 in April.
Sterling was lower against the euro, with EUR/GBP edging up 0.12% to 0.7740.