Investing.com - The pound traded flat against the dollar on Wednesday after a soft U.K. factory gauge hit the wire, though similarly disappointing data out of the U.S. watered down the greenback as well.
In U.S. trading on Wednesday, GBP/USD was up 0.01% at 1.6215, up from a session low of 1.6162 and off a high of 1.6252.
Cable was likely to find support at 1.6160, the low from Sept. 16, and resistance at 1.6288, Tuesday's high.
Markit research group reported earlier that its U.K. manufacturing purchasing managers' index fell to 51.6 in September from a 52.2 in August, whose figure was downwardly revised from a previously estimated reading of 52.5.
Analysts had expected the index to rise to 52.5, and the disappointing figure softened demand for sterling.
"September’s disappointing reading will add to the air of caution as to whether the economy is ready for higher interest rates," said Rob Dobson, senior economist at survey compiler Markit.
Meanwhile across the Atlantic, the Institute of Supply Management reported that its manufacturing index fell to 56.6 in September from 59.0 in August.
Economists had expected the index to decline less and come in at 58.5, which softened the dollar.
The employment sub-index slowed to 54.6 from 58.1 in the previous month, while the new orders sub-index fell to 60.0 from 66.7.
At the same time, separate data revealed that U.S. construction spending fell 0.8% in August to an annual rate of $960.96 billion. Analysts were expecting a decline of only 0.5%.
Supporting the dollar, however, was an upbeat report of the U.S. private-sector labor market.
Payrolls processor ADP reported that the U.S. private sector added 213,000 jobs last month, just ahead of expectations for jobs growth of 210,000. The economy created 202,000 jobs in August.
The report came ahead of Friday’s government nonfarm payrolls report, which includes both public and private sector employment.
Elsewhere, sterling was up against the euro, with EUR/GBP down 0.10% at 0.7782, and down against the yen, with GBP/JPY down 0.31% at 177.21.
On Thursday, the U.K. is to publish data on construction activity.
The U.S. is to publish the weekly report on initial jobless claims as well as data on factory orders.