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Forex - GBP/USD erases gains after weak U.S. ISM data

Published 12/01/2010, 10:36 AM
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Investing.com – The pound erased gains against the U.S. dollar on Wednesday, retreating from a 3-day high after data showed that U.S. manufacturing activity declined slightly in November.

GBP/USD retreated from 1.5648, the pair’s highest since November 26, to hit 1.5550 during European afternoon trade, shedding 0.10%.

Cable was likely to find support at 1.5448, the low of September 15 and resistance at 1.5771, the high of November 26.

The Institute for Supply Management said its index of purchasing managers fell to 56.6 in November, after rising to 56.9 in October. Analysts had expected the index of purchasing managers to fall to 56.4 in November.

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

In a separate report, payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 93K in November, after rising by a revised 82K in October.

Analysts had expected non-farm private sector employment to increase by 65K in November.

The report said employment in the service-providing sector rose by 79K in November, the tenth consecutive monthly gain, while employment in the goods-producing sector increased by 14K, the first monthly rise since March 2007.

The pound was also down against the euro, with EUR/GBP climbing 0.73% to hit 0.8402.

Earlier in the day, data showed that U.K. manufacturing growth unexpectedly rose at the fastest pace in 16 years in November.

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