GBP/USD almost unchanged, trading close to nine-month highs after UK services data

The pound traded with stability against the US dollar on Thursday, trading in proximity to nine-month highs, following the release of a report to show that activity in the sector of services in the United Kingdom decreased at a lesser rate than projected in September.

GBP/USD slipped to a session low at 1.6191 at 7:53 GMT, after which consolidation followed at 1.6209, losing 0.09% for the day. Support was likely to be received at September 30th low, 1.6128, while resistance was to be encountered at October 1st high, 1.6260.

Earlier today it became clear that activity in the sector of services in the United Kingdom remained high in September, facilitating the increase of the PMI to its highest level for the past over 15 years. According to data by the Chartered Institute of Purchasing and Supply (CIPS) in cooperation with Markit Economics, the services PMI remained almost unchanged in the month of September, reaching a reading of 60.3 from 60.5 in August. Expectations pointed that the index will remain 60.5. Values above the key level of 50.0 usually indicate that activity in the sector has expanded. The overall result has been supported mostly by the increased sub-index of new orders. The total PMI increased to a 15-year high during the third quarter, which implied that nations Gross Domestic Product probably grew 1.2% during the same period, according to Markit. Such a growth might appear to be the strongest since the period before the debt crisis.

Another report revealed that house prices in the United Kingdom rose for the eight consecutive month in September, as demand in the housing sector increased at a faster pace than supply. Halifax Bank of Scotland (HBOS) reported that its index of house prices increased 0.3% on a monthly basis in September, retaining the rate of increase, recorded a month ago. On annual basis, house prices climbed 6.2% in September, after the 5.4% gain in August.

Meanwhile, the greenback remained under pressure, because of concerns over the effects of the government shutdown on economic recovery. House Republican leaders plan to bring up a measure to raise the debt ceiling as soon as next week as part of a new attempt to force President Obama to negotiate on the budget.

The ISM was expected to release data on activity in the US non-manufacturing sector later in the day.

Elsewhere, the pound was lower against the euro, with EUR/GBP cross gaining 0.32% on a daily basis to trade at 0.8399 at 12:13 GMT. It was reported that retail sales in the euro zone rose more than expected in August, climbing 0.7% on a monthly basis, while preliminary estimates pointed a 0.2% increase. Julys result was revised up to a 0.5% gain from a 0.1% gain previously. In June retail sales dropped 0.8%. Sales of food, drinks and tobacco decreased 0.4% in August compared to July, while sales of other categories of goods, excluding food and fuel, rose 0.6% during the same month.