LONDON, July 3 Reuters The pound rose on Wednesday, taking advantage of a softening in the dollar and a reading of business activity that showed growth in the British services sector cooled in June, but not by as much as initially forecast.

The U.S. currency weakened against most others on Wednesday, bar the Japanese yen and Chinese yuan, after comments from Federal Reserve Chair Jerome Powell the previous day reinforced expectations that interest rate cuts were not far off.

Sterling was last up 0.13 on the day at 1.2703, set for a fifth straight day of gains and was flat against the euro at 84.72 pence.

The SP Global UK Services Purchasing Managers Index fell in June to 52.1 from 52.9 in May, its lowest reading since November but revised up from a preliminary estimate of 51.2.

Data provider SP Global linked the slowdown to companies taking a waitandsee approach to the outcome of Britain39;s national election on Thursday. Opinion polls show the opposition Labour Party is set to win, possibly with a record breaking majority.

The UK election is unlikely to be a major market event. If the exit poll at 10 pm UK time 2100 GMT shows a large Labour majority and the Conservative party as the second largest party, the market will quickly move on to focus on other factors, Deutsche Bank strategist Shreyas Gopal said in a note.

Those other factors include the final round of voting in France39;s parliamentary election, set for July 7, and key UK data later on in the month…