Investing.com - The pound retreated from nine-month highs against the dollar on Tuesday after a report showed that the U.S. manufacturing sector expanded at the fastest rate since April 2011 last month.
GBP/USD pulled back from 1.6260, the pair’s highest since early January, to hit 1.6191 during U.S. morning trade, to trade just 0.05% higher for the day.
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 was boosted after a report compiled by the Institute for Supply Management showed that its manufacturing purchasing managers’ index rose to 56.2 in September from 55.7 in August.
Analysts had expected the index to decline to 55.0.
The employment component of the index rose to 55.4 from 53.3 in August, while the production index rose to 62.6 from 62.4.The new orders index declined to 60.5 from 63.2 in August.
The dollar remained under pressure as the U.S. government began a partial shutdown after Congress failed to reach an agreement on a budget for the new fiscal year.
Investor sentiment was hit by worries that the first 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.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Sterling briefly dipped lower against the dollar earlier 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 PMI 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.
The pound was slightly higher against the euro, with EUR/GBP slipping 0.10% to 0.8347.
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.
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%.
GBP/USD pulled back from 1.6260, the pair’s highest since early January, to hit 1.6191 during U.S. morning trade, to trade just 0.05% higher for the day.
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 was boosted after a report compiled by the Institute for Supply Management showed that its manufacturing purchasing managers’ index rose to 56.2 in September from 55.7 in August.
Analysts had expected the index to decline to 55.0.
The employment component of the index rose to 55.4 from 53.3 in August, while the production index rose to 62.6 from 62.4.The new orders index declined to 60.5 from 63.2 in August.
The dollar remained under pressure as the U.S. government began a partial shutdown after Congress failed to reach an agreement on a budget for the new fiscal year.
Investor sentiment was hit by worries that the first 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.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Sterling briefly dipped lower against the dollar earlier 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 PMI 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.
The pound was slightly higher against the euro, with EUR/GBP slipping 0.10% to 0.8347.
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.
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%.