Investing.com - The pound was trading close to two-and-a-half month highs against the dollar on Wednesday after data showed that the contraction in the U.K. manufacturing sector slowed in April.
GBP/USD hit 1.5591 during European afternoon trade, the pair’s highest since February 13; the pair subsequently consolidated at 1.5570, gaining 0.25%.
Cable is likely to find support at 1.5524, the session low and resistance at 1.5688, the high of February 13.
Markit said that its U.K. manufacturing purchasing managers’ index rose to a seasonally adjusted 49.8 from 48.6 in March, just below the 50 level that separates growth from contraction.
Analysts had expected the index to tick down to 48.5.
“The sector should at least be less of a drag on broader GDP growth in the second quarter”, said Rob Dobson, senior economist at Markit.
The dollar remained under pressure ahead of the outcome of the Federal Reserve’s latest policy meeting later in the day after recent soft economic data dampened expectations for an earlier-than-expected end to the bank’s asset purchase program.
Data on Tuesday showed that the Chicago purchasing managers’ index slumped to the lowest level since September 2009 in April.
The data came after a report last week showed that the U.S. economy grew 2.5% in the first quarter, falling short of expectations for 3.0% growth.
Sterling was lower against the euro, with EUR/GBP rising 0.21% to 0.8493.
The euro pushed higher despite growing expectations that the European Central Bank would cut rates at its meeting on Thursday after recent comments by ECB officials indicated that the bank would consider adjusting rates if economic data continued to deteriorate.
Data on Tuesday showed that euro zone unemployment rose to a record 12.1% in March, while inflation fell more-than-expected in April.
Trade volumes looked set to remain thin on Wednesday, with many bourses in Europe shut for the Labor Day holiday.
Later Wednesday, the U.S. was to release data on ADP nonfarm payrolls, while the Institute of Supply Management was to publish its report on manufacturing activity.
GBP/USD hit 1.5591 during European afternoon trade, the pair’s highest since February 13; the pair subsequently consolidated at 1.5570, gaining 0.25%.
Cable is likely to find support at 1.5524, the session low and resistance at 1.5688, the high of February 13.
Markit said that its U.K. manufacturing purchasing managers’ index rose to a seasonally adjusted 49.8 from 48.6 in March, just below the 50 level that separates growth from contraction.
Analysts had expected the index to tick down to 48.5.
“The sector should at least be less of a drag on broader GDP growth in the second quarter”, said Rob Dobson, senior economist at Markit.
The dollar remained under pressure ahead of the outcome of the Federal Reserve’s latest policy meeting later in the day after recent soft economic data dampened expectations for an earlier-than-expected end to the bank’s asset purchase program.
Data on Tuesday showed that the Chicago purchasing managers’ index slumped to the lowest level since September 2009 in April.
The data came after a report last week showed that the U.S. economy grew 2.5% in the first quarter, falling short of expectations for 3.0% growth.
Sterling was lower against the euro, with EUR/GBP rising 0.21% to 0.8493.
The euro pushed higher despite growing expectations that the European Central Bank would cut rates at its meeting on Thursday after recent comments by ECB officials indicated that the bank would consider adjusting rates if economic data continued to deteriorate.
Data on Tuesday showed that euro zone unemployment rose to a record 12.1% in March, while inflation fell more-than-expected in April.
Trade volumes looked set to remain thin on Wednesday, with many bourses in Europe shut for the Labor Day holiday.
Later Wednesday, the U.S. was to release data on ADP nonfarm payrolls, while the Institute of Supply Management was to publish its report on manufacturing activity.