Investing.com - The pound softened against the dollar on Friday after a U.S. factory barometer beat expectations and fanned expectations for the Federal Reserve to scale back dollar-weakening stimulus programs in the coming months, especially its USD85 billion monthly bond-buying program.
Stimulus programs tend to weaken the dollar by driving down interest rates to spur recovery, and talk of their dismantling often strengthens the greeback.
In U.S. trading on Friday, GBP/USD was trading at 1.5922, down 0.72%, up from a session low of 1.5909 and off from a high of 1.6046.
Cable was likely to find support at 1.5894, the low from Oct. 16, and resistance at 1.6208, Monday's high.
In the U.S., a widely-watched factory barometer beat forecasts and fanned expectations for the Federal Reserve to scale back dollar-weakening stimulus programs in the coming months, which sent the dollar rising.
The Institute of Supply Management's Manufacturing Purchasing Managers Index rose to 56.4 in October from 56.2 in September, defying expectations for a decline to 55.0.
The report came a day after data showed that manufacturing activity in the Chicago region expanded at the fastest rate in 30 years in October, while a separate report showed that U.S. initial jobless claims fell in line with expectations last week.
Across the Atlantic, the pound came under pressure earlier after the Markit research group said the U.K. manufacturing purchasing managers' index fell to 56.0 in October from a downwardly revised reading of 56.3 the previous month.
Analysts were expecting the index to tick down to 56.1 last month.
The pound, meanwhile, was flat against the euro and down against the yen, with EUR/GBP down 0.01% at 0.8470 and GBP/JPY down 0.30% at 157.28.
On Thursday, official data revealed that the euro zone's consumer price index rose 0.7% in October, the slowest pace since November 2009, after rising 1.1% in September, while the unemployment rate came in at a record high 12.2% in September.
The date fueled expectations that the European Central Bank may trim interest rates at a monetary policy meeting next week or not far down the road, which pressured the euro lower.
Stimulus programs tend to weaken the dollar by driving down interest rates to spur recovery, and talk of their dismantling often strengthens the greeback.
In U.S. trading on Friday, GBP/USD was trading at 1.5922, down 0.72%, up from a session low of 1.5909 and off from a high of 1.6046.
Cable was likely to find support at 1.5894, the low from Oct. 16, and resistance at 1.6208, Monday's high.
In the U.S., a widely-watched factory barometer beat forecasts and fanned expectations for the Federal Reserve to scale back dollar-weakening stimulus programs in the coming months, which sent the dollar rising.
The Institute of Supply Management's Manufacturing Purchasing Managers Index rose to 56.4 in October from 56.2 in September, defying expectations for a decline to 55.0.
The report came a day after data showed that manufacturing activity in the Chicago region expanded at the fastest rate in 30 years in October, while a separate report showed that U.S. initial jobless claims fell in line with expectations last week.
Across the Atlantic, the pound came under pressure earlier after the Markit research group said the U.K. manufacturing purchasing managers' index fell to 56.0 in October from a downwardly revised reading of 56.3 the previous month.
Analysts were expecting the index to tick down to 56.1 last month.
The pound, meanwhile, was flat against the euro and down against the yen, with EUR/GBP down 0.01% at 0.8470 and GBP/JPY down 0.30% at 157.28.
On Thursday, official data revealed that the euro zone's consumer price index rose 0.7% in October, the slowest pace since November 2009, after rising 1.1% in September, while the unemployment rate came in at a record high 12.2% in September.
The date fueled expectations that the European Central Bank may trim interest rates at a monetary policy meeting next week or not far down the road, which pressured the euro lower.