A broadly weaker sterlingl lost ground to the USD yesterday but has posted gains in trading this morning

The pound dropped nearly a cent against the US dollar following a below forecast figure from the UK services sector.

• Sterling traded strongly against the haven currency in early trading after the Bank of America announced that it was ready to repay taxpayer bailout funds, which boosted investor confidence.
  
• However, the pound came under pressure after data revealed that the UK services sector expanded at a slower rate in November than the market had anticipated.
  
• Although the figure marked the seventh consecutive month above the 50 level, which indicates expansion, the below-forecast headline number was enough to push the pound off an earlier one-week high against the dollar.
  
• In the afternoon, the US currency received support following data that showed US manufacturing contracted in November after growing modestly the prior month, which raised doubts about the strength of the US economy and undermined risk appetite.
  
• The manufacturing data offset more encouraging figures from the Labour market which again showed a slowing rate of unemployment claims this week.
  
• In trading this morning, the pound has risen nearly half a percent as investors await key employment data released in the US at 13:30.