Last night's Federal Reserve interest rate announcement and statement helped the dollar strengthen across the board, forcing the GBP/USD cross below $1.29. For the best dollar exchange rates click here.
As markets opened this morning the pound was trading around $1.2840 against the dollar, down almost a cent from the highs we witnessed during Wednesday's session. However, another strong data release from the UK at 0930 has helped the pound recover some of the ground, with the GBP/USD cross pushing back towards the $1.29 mark.
GBP/USD graph
For the third consecutive day the UK has posted a better than expected PMI reading. Today it was the country's Services PMI figures which beat forecasts, coming in at 55.8 against the predicted 54.6 (a reading over 50 indicates growth in the sector).
Today's Services PMI reading follows Tuesday's excellent Manufacturing PMI and Wednesday's positive Construction PMI figures.
The economic data we have seen over the past three days proves the UK economy is still performing well, despite the concerns over Britain's exit from the European Union and has certainly given the pound a solid foundation as we head into the official negotiations.
Why did the dollar strengthen after the Federal Reserve announcements?
Unsurprisingly, the Federal Reserve kept interest rates on hold last night but it was Fed Chair Yellen's comments that helped strengthen the dollar.
The Fed were upbeat despite weak quarter one economic growth, and left another rate hike firmly on the table in June.
The U.S. central bank focused on the strength of the labor market, which investors took as a sign the Fed are still on course to raise interest rates two more times over the course of this year.
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