Investing.com – The pound trimmed losses against the U.S. dollar on Tuesday, pulling away from a four-day low after industry data showed that the pace of U.S. manufacturing activity slowed unexpectedly in October.
GBP/USD pulled back from 1.5889, the pair’s lowest since October 26, to hit 1.5943 during U.S. morning trade, still down 0.88% over the day.
Cable was likely to find short-term support at 1.5890, the low of October 26 and resistance at 1.6092, the days high.
Sterling found support after the U.S. Institute for Supply Management said its index of purchasing managers dipped to 50.8 from 51.6 the previous month, confounding expectations for a gain to 52.1.
The pound fell sharply earlier, tracking the euro’s losses, after Greek Prime Minister George Papandreou announced a surprise referendum on the country’s bailout program.
If Greece rejects the deal it would put the next tranche of aid to Athens in jeopardy, moving the country towards the brink of default and increasing the risk of contagion in global financial markets.
The pound also came under pressure after data showing that manufacturing activity in the U.K. fell to a 28-month low in October added to concerns over outlook for the economy, despite stronger-than-expected third quarter growth.
The U.K. manufacturing purchasing managers' index fell to a seasonally adjusted 47.4 in October, down from a reading of 50.8 in September. Analysts had expected the index to decline to 50.0 in October.
The report overshadowed data from the Office for National Statistics showing that gross domestic product increased by 0.5% in the third quarter, up from the 0.1% rate of growth in the preceding quarter and surpassing expectations for a 0.4% gain.
Elsewhere, the pound was higher against the euro, with EUR/GBP shedding 0.47% to hit 0.8572.
Also Tuesday, government data showed that Chinese manufacturing activity fell to its lowest level since February 2009 in October, while the Reserve Bank of Australia's decision to cut interest rates for the first time in more than two years underlined weakness in the global economy.
GBP/USD pulled back from 1.5889, the pair’s lowest since October 26, to hit 1.5943 during U.S. morning trade, still down 0.88% over the day.
Cable was likely to find short-term support at 1.5890, the low of October 26 and resistance at 1.6092, the days high.
Sterling found support after the U.S. Institute for Supply Management said its index of purchasing managers dipped to 50.8 from 51.6 the previous month, confounding expectations for a gain to 52.1.
The pound fell sharply earlier, tracking the euro’s losses, after Greek Prime Minister George Papandreou announced a surprise referendum on the country’s bailout program.
If Greece rejects the deal it would put the next tranche of aid to Athens in jeopardy, moving the country towards the brink of default and increasing the risk of contagion in global financial markets.
The pound also came under pressure after data showing that manufacturing activity in the U.K. fell to a 28-month low in October added to concerns over outlook for the economy, despite stronger-than-expected third quarter growth.
The U.K. manufacturing purchasing managers' index fell to a seasonally adjusted 47.4 in October, down from a reading of 50.8 in September. Analysts had expected the index to decline to 50.0 in October.
The report overshadowed data from the Office for National Statistics showing that gross domestic product increased by 0.5% in the third quarter, up from the 0.1% rate of growth in the preceding quarter and surpassing expectations for a 0.4% gain.
Elsewhere, the pound was higher against the euro, with EUR/GBP shedding 0.47% to hit 0.8572.
Also Tuesday, government data showed that Chinese manufacturing activity fell to its lowest level since February 2009 in October, while the Reserve Bank of Australia's decision to cut interest rates for the first time in more than two years underlined weakness in the global economy.