* Graphic: Sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
By Ritvik Carvalho
LONDON, May 4 Sterling held steady below
seven-month highs against the dollar on Thursday as investors
awaited the results of a survey of Britain's huge services
sector, following stronger-than-expected data in a corresponding
For most of Wednesday the pound held steady, brushing off a
verbal spat between Britain and the European Union suggesting
negotiations over Britain's departure from the bloc could become
But after Federal Reserve minutes left room for a U.S.
interest rate rise in June the pound fell more than half a
percent against the greenback.
On Thursday it was flat on the day at $1.2865, just a cent
below April's peak of $1.2965.
Economists expect the Markit/CIPS purchasing managers' index
for the dominant services sector, due out at 0830 GMT, to slip
slightly for April from March's reading.
"Any confirmation of more muted conditions should increase
uncertainty ahead of next week’s BoE inflation report and
trigger renewed currency weakness," Credit Agricole strategists
wrote in a note to clients.
"This is especially true as the latest news flow is keeping
uncertainty with respect to Brexit negotiations firmly intact."
Corresponding construction and manufacturing sector surveys
earlier this week exceeded market expectations.
The pound's steep fall after last year's Brexit vote has
aggravated domestic inflation, and analysts say the notion that
faster price rises are taking a toll on services remains in
Nevertheless, they say the lift to sterling after May's
announcement of a snap election next month should help tame
inflation and ease the strain on consumers, who propped up the
UK economy with robust spending after the EU referendum.
The pound was down 0.2 percent at 84.73 pence per euro.
(Editing by Hugh Lawson)