The British pound tested the $1.29 level on the downside on Tuesday as a measure of the British service sector steadied in October, suggesting activity growth remained sluggish.
The IHS Markit/CIPS U.K. services PMI rose to the 50 mark in October from 49.5 in September. Economists had expected a reading of 49.7.
Service providers reported lower intakes of new business for the second month running in October, and seventh time in 10 months, but the 12-month outlook for service sector activity improved to a three-month high in October, as some firms mentioned that uncertainty would be reduced following any resolution to Brexit in early-2020.
The pound GBPUSD, +0.1242% traded as high as $1.2916, and recently was at $1.2898 vs. the $1.2882 close on Monday.
The FTSE 100 meanwhile joined the global stock-market rally on optimism over a possible U.S.-China trade pact, with oil giants BP BP, +2.00% and Royal Dutch Shell RDSA, +1.26% both advancing. The FTSE 100 UKX, +0.33% rose 0.31% to 7392.17.
Associated British Foods ABF, +4.62% climbed nearly 5% as the Primark owner reported better-than-forecast annual profit and guided for a small decline in U.K. margins in the next fiscal year.
“Assuming 12x EBITDA for Grocery, the implied EBITDA multiple of Primark at <8x seems harsh, which is a multiple close to M&S MKS, -1.25% and a discount to Next NXT, +0.06% ,” said analysts at Barclays.