Investing.com - The euro dropped against the pound on Monday, as disappointing manufacturing data from the euro zone, while a positive report from the U.K. lent support to sterling.
EUR/GBP hit 0.7924 during late Asian trade, the session low; the pair subsequently consolidated at 0.7926, declining 0.42%.
The pair was likely to find support at 0.7910, the low of November 28 and resistance at 0.7977, the session high.
Sentiment on the euro was vulnerable after data on Monday showed that the euro zone’s manufacturing purchasing managers’ index slowed to 50.1 from a preliminary reading of 50.4 last month, just barely above the 50 level separating growth from contraction.
Germany’s manufacturing PMI entered contraction territory for the first time in 17 months, falling to 49.5, as new orders fell at the fastest rate in nearly two years.
The French manufacturing PMI remained in contraction territory at 48.4, while Italy’s factory PMI came in at 49.0.
The reports came after data on Friday showed that the annual rate of euro area inflation slowed to a five year low of 0.3% in November, down from 0.4% in October.
The weak data added to pressure on the European Central Bank to step up measures to spur growth and stave off the threat of deflation ahead of its upcoming policy meeting on Thursday.
Meanwhile, in the U.K., data showed that the manufacturing PMI rose to a four-month high of 53.5 last month from a reading of 53.2 in October.
Analysts had expected the index to inch down to 53.1 in November.
A separate report showed that U.K. net lending to individuals rose by £2.6 billion in October, less than the expected £2.8 billion increase, after a £2.7 billion rise in September.
Sterling was higher against the dollar, with GBP/USD climbing 0.66% to 1.5742.
Later in the day, the U.S. Institute of Supply Management was to release data on manufacturing activity.