June 5, 2019 / 8:21 AM / 2 months ago

Sterling hits seven-day high before services sector survey

* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

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

LONDON, June 5 (Reuters) - Sterling rose to a seven-day high on Wednesday, helped by weakness in the U.S. dollar, as traders prepared for a survey on the performance of the vital services sector in the month of May.

With uncertainty over who the next British prime minister will be and concerns about the prospect of a no-deal Brexit, the pound has remained under pressure - it’s recovery from five-month lows hit on Friday has been more to do with a selloff in the dollar than improved sentiment towards the pound.

Promises from U.S. President Donald Trump of a “phenomenal” post-Brexit trade deal on Tuesday also did little to move the currency, as the race to replace PM Theresa May and Brexit dominate trading of the pound.

The upcoming Purchasing Managers Index services survey, which will be released at 0830 GMT, is expected to show a tiny improvement to a reading of 50.6 in May from 50.4 in April, according to a Reuters poll of economists.

Recent surveys in the manufacturing and construction sectors have pointed to weakening momentum in the British economy.

Sterling was unchanged at $1.2701 after earlier rising to $1.2723.

Against the euro it has remained under pressure, and lost another 0.1% to 88.72 pence, slightly above 5-1/2 month lows. (Reporting by Tommy Wilkes; Editing by Toby Chopra)

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