Forex – The pound extended losses against the U.S. dollar on Monday, falling to a fresh one-week low as sustained fears over the potential impact of a debt default by Greece saw investors pile into safe haven assets.
GBP/USD hit 1.5451 during U.S. morning trade, the pair’s lowest since September 26; the pair subsequently consolidated at 1.5476, shedding 0.69%.
Cable was likely to find support at 1.5431, the low of September 26 and resistance at 1.5664, last Friday’s high.
Earlier in the day, the U.S. Institute of Supply Management said its manufacturing purchasing managers’ index rose to 51.6 from 50.6 in August, as production and hiring increased.
Analysts had expected the index to tick down to 50.5 in September.
But the data was overshadowed by concerns over the potential impact of a Greek default on Europe’s already fragile banking sector.
In the U.K., a report earlier showed that manufacturing activity rebounded from a 26-month low in September.
The Markit/CIPS manufacturing PMI rose to 51.1 last month from an upwardly revised 49.4 in August. The reading was well above forecasts of 48.6 and above the 50 level that separates growth from contraction.
However, the report said growth remained below the levels seen at the beginning of the year and that the contribution of the manufacturing sector to the overall economic recovery looked likely to remain “modest, at best” for the remainder of the year.
The pound was also hit by speculation that the Bank of England may restart its asset purchase program, possibly as soon as this week, after a recent string of soft economic data sparked fears the economic recovery in the U.K. is losing momentum.
Meanwhile, the pound was higher against the euro, with EUR/GBP shedding 0.22% to hit 0.8570.
Meanwhile, euro zone finance ministers were meeting in Brussels to discuss options for increasing the capacity of the region’s bailout fund, the European Financial Stability Facility.
GBP/USD hit 1.5451 during U.S. morning trade, the pair’s lowest since September 26; the pair subsequently consolidated at 1.5476, shedding 0.69%.
Cable was likely to find support at 1.5431, the low of September 26 and resistance at 1.5664, last Friday’s high.
Earlier in the day, the U.S. Institute of Supply Management said its manufacturing purchasing managers’ index rose to 51.6 from 50.6 in August, as production and hiring increased.
Analysts had expected the index to tick down to 50.5 in September.
But the data was overshadowed by concerns over the potential impact of a Greek default on Europe’s already fragile banking sector.
In the U.K., a report earlier showed that manufacturing activity rebounded from a 26-month low in September.
The Markit/CIPS manufacturing PMI rose to 51.1 last month from an upwardly revised 49.4 in August. The reading was well above forecasts of 48.6 and above the 50 level that separates growth from contraction.
However, the report said growth remained below the levels seen at the beginning of the year and that the contribution of the manufacturing sector to the overall economic recovery looked likely to remain “modest, at best” for the remainder of the year.
The pound was also hit by speculation that the Bank of England may restart its asset purchase program, possibly as soon as this week, after a recent string of soft economic data sparked fears the economic recovery in the U.K. is losing momentum.
Meanwhile, the pound was higher against the euro, with EUR/GBP shedding 0.22% to hit 0.8570.
Meanwhile, euro zone finance ministers were meeting in Brussels to discuss options for increasing the capacity of the region’s bailout fund, the European Financial Stability Facility.