Investing.com - The pound was almost unchanged against the U.S. dollar on Monday, trading near five-and-a-half week lows after downbeat U.S. manufacturing report weighed on demand for the greenback, although an earlier than anticipated U.S. rate hike still lent some support.
GBP/USD hit 1.6466 during U.S. morning trade, the pair's lowest since February 12; the pair subsequently consolidated at 1.6478, easing 0.06%.
Cable was likely to find support at 1.6393, the low of February 11 and resistance at 1.6568, the high of March 20.
Market research group Markit said that its preliminary U.S. manufacturing purchasing managers’ index fell to a two-month low of 55.5 in March from a final reading of 57.1 in February. Analysts had expected the index to dip to 56.5 in March.
But the greenback remained supported after markets brought forward expectations for rise in U.S. borrowing costs after Federal Reserve Chair Janet Yellen suggested last week that rates might start to rise about six months after the bank’s stimulus program ends, which is expected to happen in the fall.
Separately, markets were jittery after a report showed that Chinese manufacturing activity deteriorated again in March.
The preliminary reading of China’s HSBC manufacturing PMI fell to an eight-month low of 48.1 in March from a final reading of 48.5 in February. Analysts had expected the index to tick up to 48.7.
Sterling was fractionally higher against the euro, with EUR/GBP easing 0.08% to 0.8359.
Sentiment on the single currency remained fragile after data showed that German private sector activity slowed in March. The data overshadowed another report showing a return to growth in the bloc’s second largest economy, France.
The pace of the recovery in the euro zone’s private sector slowed slightly in March, but remained close to the previous month’s two-and-a-half year highs.