Investing.com - The pound pared gains against the U.S. dollar on Tuesday, after the release of disappointing U.K. manufacturing data, although positive news for the British banking sector continued to support.
GBP/USD pulled back from 1.5126, the pair's highest since November 26, to hit 1.5085 during European morning trade, still up 0.18%.
Cable was likely to find support at 1.4990, Monday's low and a seven-month low and resistance at 1.5197, the high of November 23.
Research group Markit reported on Tuesday that its U.K. manufacturing purchasing managers' index fell to 52.7 last month from a revised reading of 55.2 in October. Analysts had expected the index to decline to 53.6 in November.
But the pound remained supported after Bank of England Governor Mark Carney said that no new wave of capital regulation was scheduled for U.K. banks.
Carney was speaking after the BoE's Financial Stability Report and the results of U.K. bank stress tests were released earlier in the day.
The BoE had said earlier Tuesday that it would require banks to hold as much as £10 billion extra capital as the credit cycle moves into a more normal phase, but stopped short of immediate action.
The BoE also said that all seven major U.K. banks passed stress tests, although Standard Chartered (L:STAN) and the Royal Bank of Scotland (L:RBS) fell short in some parts of the assessment.
It was the central bank's second public stress test, as it seeks to boost investor confidence in the U.K. financial sector.
Meanwhile, speculation that the Federal Reserve will raise interest rates at its December meeting continued to lend broad support to the greenback.
Investors were eyeing a string of U.S. economic reports this week for further indications on the strength of the economy, as the Fed has said that any decision on interest rates will depend on data.
Sterling was steady against the euro, with EUR/GBP at 0.7023.
Markit said its German manufacturing PMI rose to 52.9 in November from 52.6 the previous month.
Also in Germany, data showed that the number of unemployed people declined by 13.000 last month, compared to expectations for a 5.000 drop.
Sentiment on the euro remained vulnerable however, as the European Central Bank has been signaling over the past weeks that it is ready to implement additional easing measures in order to boost inflation in the euro zone and support growth.