* Single currency slips to one-month low vs sterling
* Investors don't expect QE at Thursday's BoE meeting
* Stronger services data could support rate hold view
By Philip Baillie
LONDON Nov 5, The euro fell to a one-month low
against sterling on Monday with investors expecting positive UK
services sector data later and increasingly lowing expectations
of more monetary easing this week.
UK's purchasing managers' index survey due at 0928 GMT is
expected to show growth in activity, a Reuters poll showed, with
economists expecting a number above 50, indicating expansion.
In contrast, much of the euro zone is struggling with a
sharp downturn and fresh uncertainty about whether Greece can
pass crucial labour reforms for it to receive more financial aid
also weighing down on the single currency.
The euro fell against sterling to a one-month
low of 79.86 pence, its lowest since Oct 2. Against the buoyant
dollar, the pound fell 0.2 percent to $1.6000.
A stronger services indicator would add to a more optimistic
picture of the UK economy, with third-quarter growth coming in
higher than expected and healthier construction data last week,
would all help to bolster the pound.
Stronger services data could also reduce expectations of the
Bank of England opting for more asset purchases, or quantitative
easing. More QE usually hurts a currency as it increases the
"We expect services to be largely constructive, but the main
event this week is the monetary policy committee's meeting on
Thursday," said Paul Robinson, head of European FX research at
"Following comments of dampened expectations of quantitative
easing from members we expect rates to be held."
Most analysts expect the Bank of England's monetary policy
committee to hold rates and keep its asset purchase programme
unchanged until early 2013.
Some analysts, however, expect the bank to slightly increase
its stimulus programme. And that uncertainty is likely to check
sharp gains in the pound, traders said.
"From the BoE we expect a 25 billion pound boost to the QE
securities purchasing limit," Credit Agricole told clients in a