April 5, 2018 / 8:16 AM / 3 months ago

Sterling edges lower ahead of services PMI data

* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv

LONDON, April 5 (Reuters) - Sterling slipped against the dollar on Thursday as the dollar rebounded on an ease in global trade war fears and investors paused ahead of a survey of Britain’s crucial services sector.

Britain’s services sector, which accounts for close to four-fifths of the economy, is expected to have slowed slightly in March as measured by the Markit Purchasing Managers Index survey, according to a poll of analysts by Reuters. That compares with a reading of 54.5 in February.

The March data is due at 0830 GMT.

An unusually cold bout of weather has been blamed for weaker-than-expected construction activity in March, and traders this week have shrugged off the data as they focus on any signs economic weakness could steer the Bank of England from its path of an expected interest rate rise in May.

“For now, broader economic conditions still look consistent with the BoE following through with a widely expected rate hike at its next MPC meeting in May,” MUFG analysts said in a note, citing manufacturing data published earlier in the week that showed little sign of impact from March’s poor weather.

That predicted rate rise in May is largely baked into sterling’s price, and combined with Britain agreeing a Brexit transition deal last month and dollar weakness caused by a growing trade dispute with China have kept the pound above $1.40.

The British currency fell 0.2 percent at $1.4057 at 0800 GMT as the dollar gained more broadly.

Against the euro, sterling was flat at 87.205 pence per euro . (Reporting by Tommy Wilkes; Editing by Angus MacSwan)

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