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TMCNet:  Forex - GBP/USD dips as dollar gains on thawing Russia-Ukraine relations [Forexpros]

[September 03, 2014]

Forex - GBP/USD dips as dollar gains on thawing Russia-Ukraine relations [Forexpros]

(Forexpros Via Acquire Media NewsEdge) Investing.com - Investing.com - The pound slid against the dollar on Wednesday despite upbeat U.K. service-sector data, as thawing relations between Ukraine and Russia sparked demand for the greenback.


Geopolitical concerns often weaken the dollar by stoking fears that military conflicts will weigh on the global economy and drag on U.S. recovery as a consequence.

In U.S. trading on Wednesday, GBP/USD was down 0.15% at 1.6446 up from a session low of 1.6442 and off a high of 1.6498.

Cable was likely to find support at 1.6380, the low from Feb, 10, and resistance at 1.6613, Friday's high.

Market research group Markit reported earlier that its seasonally adjusted Markit/CIPS Services Purchasing Managers Index rose to 60.5 last month from 59.1 in July. Analysts had expected the index to decline to 58.5 in August.

The data came a day after data showed that activity in the U.K. construction sector expanded at the fastest rate since January last month.

Still, the pound came under broad selling pressure after a poll revealed that support for Scottish independence is growing.

The greenback, meanwhile, found support after Ukraine's President Petro Poroshenko said he had agreed with Russian President Vladimir Putin to take steps to establish a "permanent ceasefire" in eastern Ukraine.

Putin later said his views were "very close" with Poroshenko on finding a political way out of the conflict.

Elsewhere in the U.S., the U.S. Census Bureau reported earlier that factory orders rose 10.5% in July, below expectations for an increase of 11%, after a revised 1.5% rise in June.

On Tuesday, the Institute for Supply Management reported that its manufacturing purchasing managers' index jumped to 59.0 in August from 57.1 in July, defying analysts' calls for the index to tick down to 56.8.

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

Elsewhere, sterling was down against the euro, with EUR/GBP up 0.20% at 0.7989, and down against the yen, with GBP/JPY down 0.36% at 172.46.

On Thursday, the U.S. is to release trade-balance data, the ADP report on private-sector job creation and the weekly report on initial jobless claims.

Also on Thursday, the ISM is to publish a report on U.S. service sector activity.

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