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Forex - GBP/USD trims gains as weak U.K. PMI data weighs

Published 07/04/2011, 07:48 AM
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Investing.com – The pound trimmed gains against the U.S. dollar on Monday, as a report showing that construction sector activity in the U.K. slowed in June reinforced expectation that the Bank of England is unlikely to raise rates in the near term.

GBP/USD pulled away from 1.6140, the pair’s highest since June 22 to hit 1.6076 during European early afternoon trade, still up 0.02% on the day.

Cable was likely to find support at 1.5969, the low of June 29 and resistance at 1.6198, the high of June 17.

The Markit/CIPS construction purchasing managers’ index slipped in line with expectations, dipping to 53.6 from 54.0 in May.

The data came after a report on Friday showing that manufacturing activity in the U.K. sank to a 21-month low in June underlined concerns that the country’s economic recovery is faltering.

A separate report from the BoE highlighted weakness in the housing market; showing that homeowners continued to pay back their mortgage debt at a quicker pace than they added to it.

The pound was also higher against the euro, with EUR/GBP slipping 0.16% to hit 0.9020.

Earlier Monday, ratings agency Standard and Poor’s said a proposed rollover of Greek sovereign debt may put the country into selective default.

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