Investing.com - The pound was hovering close to eight-month highs against the broadly weaker dollar on Tuesday as the U.S. government went into a partial shutdown after Congress failed to reach a deal on a budget for the new fiscal year.
GBP/USD hit 1.6260 during European afternoon trade, the pair’s highest since early January; the pair subsequently consolidated at 1.6231, gaining 0.28%.
Cable was likely to find support at 1.6127, Monday’s low and near-term resistance at 1.6338, the high of January 2.
The dollar remained under broad selling pressure amid expectations that the first partial U.S. government shutdown for 17 years would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
Sterling briefly dipped lower after data showed that manufacturing activity in the U.K. slowed slightly in September, but remained close to August’s two-and-a-half year highs.
Markit said that its U.K. manufacturing purchasing managers index declined to 56.7 in September from a downwardly revised 57.1 in August. Analysts had expected the index 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.
The pound pushed higher against the euro, with EUR/GBP slipping 0.14% to 0.8343.
In the euro zone, data released on Tuesday showed that the final reading of the bloc’s manufacturing PMI came in at 51.1 in September, unchanged from the preliminary estimate, but below August’s 26-month high of 51.4.
Another 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.
Separately, Eurostat said the total euro zone unemployment rate was 12.0% last month, while August’s rate was revised down to 12% from 12.1%.
The Institute of Supply Management was to produce a report on U.S. manufacturing activity later in the trading day.
GBP/USD hit 1.6260 during European afternoon trade, the pair’s highest since early January; the pair subsequently consolidated at 1.6231, gaining 0.28%.
Cable was likely to find support at 1.6127, Monday’s low and near-term resistance at 1.6338, the high of January 2.
The dollar remained under broad selling pressure amid expectations that the first partial U.S. government shutdown for 17 years would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.
Sterling briefly dipped lower after data showed that manufacturing activity in the U.K. slowed slightly in September, but remained close to August’s two-and-a-half year highs.
Markit said that its U.K. manufacturing purchasing managers index declined to 56.7 in September from a downwardly revised 57.1 in August. Analysts had expected the index 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.
The pound pushed higher against the euro, with EUR/GBP slipping 0.14% to 0.8343.
In the euro zone, data released on Tuesday showed that the final reading of the bloc’s manufacturing PMI came in at 51.1 in September, unchanged from the preliminary estimate, but below August’s 26-month high of 51.4.
Another 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.
Separately, Eurostat said the total euro zone unemployment rate was 12.0% last month, while August’s rate was revised down to 12% from 12.1%.
The Institute of Supply Management was to produce a report on U.S. manufacturing activity later in the trading day.