U.K. June services PMI slipped marginally, to 51.6 from 51.7, better than our survey median for a decline to 51.5. Somewhat of a correction was expected, following May's surge, as well as the decline to services PMIs in the Euro-Zone. However, the indicator shows that the sector is still expanding, which is encouraging, suggesting that the U.K. recession could soon be over, although the recovery is likely to be slow and fragile. Indeed, the new business index fell back to 49.7, below the 50-mark, from 51.8 in May, but the business expectations index was the highest since October 2007. Job cuts within the sector continued, however.
Cable turned away from its early European highs of 1.6431 amid reports of sell-orders lined up from the 1.6430-35 area. The move lower was exacerbated in thin trading conditions, while EUR-GBP buying interest from 0.8540 up to the 0.8570 area was also an influence. Cable hit 1.6341 lows, where interim support is noted ahead of the Asian base of 1.6327, where Asian reserve managers were noted with good buying interest overnight. Sell stops are noted under 1.6320 and 1.6300.
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