Investing.com - The pound eased back from nine month highs against the dollar on Tuesday after data showed that U.K. manufacturing activity slowed slightly in September, but remained close to August’s two-and-a-half year highs.
GBP/USD pulled away from 1.6259, the pair’s highest since January 2, to hit 1.6228 during European morning trade, still up 0.22% for the day.
Cable is likely to find support at 1.6127, Monday’s low and near-term resistance at 1.6338, the high of January 2.
Markit said that its U.K. manufacturing purchasing managers’ index fell to 56.7 in September from a downwardly revised reading of 57.1 in August.
Analysts had expected the manufacturing PMI to tick up to 57.3.
“U.K. manufacturing continues to boom, adding to the flow of upbeat data which suggest that the economy is growing faster than almost anyone expected,” Rob Dobson, senior economist at Markit said.
“This stronger than expected performance will raise further questions in the City with regards to the Bank of England’s forward guidance on interest rates remains appropriate,” he added.
The dollar remained broadly lower as the U.S. government began a partial shutdown after Congress failed to reach an agreement on a budget for the new financial year. It is the first partial government shutdown in the U.S. for 17 years.
Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
Sterling was fractionally higher against the euro, with EUR/GBP dipping 0.06% to 0.8351.
Data released on Tuesday showed that the final reading of the euro zone manufacturing PMI was unchanged at 51.1 in September, in line with forecasts.
A separate report showed that the number of unemployed people in Germany rose for the second consecutive month in September, while the country’s jobless rate rose to 6.9% from 6.8% in August.
GBP/USD pulled away from 1.6259, the pair’s highest since January 2, to hit 1.6228 during European morning trade, still up 0.22% for the day.
Cable is likely to find support at 1.6127, Monday’s low and near-term resistance at 1.6338, the high of January 2.
Markit said that its U.K. manufacturing purchasing managers’ index fell to 56.7 in September from a downwardly revised reading of 57.1 in August.
Analysts had expected the manufacturing PMI to tick up to 57.3.
“U.K. manufacturing continues to boom, adding to the flow of upbeat data which suggest that the economy is growing faster than almost anyone expected,” Rob Dobson, senior economist at Markit said.
“This stronger than expected performance will raise further questions in the City with regards to the Bank of England’s forward guidance on interest rates remains appropriate,” he added.
The dollar remained broadly lower as the U.S. government began a partial shutdown after Congress failed to reach an agreement on a budget for the new financial year. It is the first partial government shutdown in the U.S. for 17 years.
Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
Sterling was fractionally higher against the euro, with EUR/GBP dipping 0.06% to 0.8351.
Data released on Tuesday showed that the final reading of the euro zone manufacturing PMI was unchanged at 51.1 in September, in line with forecasts.
A separate report showed that the number of unemployed people in Germany rose for the second consecutive month in September, while the country’s jobless rate rose to 6.9% from 6.8% in August.