Pound Higher On Positive Economic Data

The Pound Sterling continued to hold in positive territory following the release of a survey which suggested that the U.K’s economy is finally on the road to recovery. According to a survey by Markit Economics, the July’s services sector reading improved to 60.2 against expectations of a rise to 57.2 from June’s 56.9. Historically, the industry’s growth was at the quickest pace in about seven months. Analysts expect gains to be limited as investors await the release of Wednesday’s inflation report from the Bank of England which is likely to indicate that the current monetary policy of low interest rates will endure for an extended period of time. During the Asian session the GBP/USD pair traded at a 1-week peak of $1.5380 before slipping to $1.5346.

The New Zealand Dollar also managed to reverse most of yesterday’s losses which brought the pair down to a 1-year trough of $0.7670 following the news that dairy exporter Fonterra had reported that some of its products might have been contaminated. Investors and customers were reassured by the company which later helped to push the pair back up to $0.7848. Analysts say that the Kiwi Dollar was also being bolstered by expectations that the New Zealand Reserve Bank will be raising its benchmark interest rate later this year.