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Forex - GBP/USD little changed after U.K. data, close to 2-1/2 week low

Published 10/01/2012, 04:56 AM
Updated 10/01/2012, 04:57 AM
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Investing.com - The pound was little changed against the U.S. dollar on Monday, hovering close to a two-and-a-half week low after the release of downbeat U.K. data, while concerns over global economic growth continued to weigh.

GBP/USD hit 1.6110 during European morning trade, the pair's lowest since September 13; the pair subsequently consolidated at 1.6151, edging down 0.010%.

Cable was likely to find support at 1.6077, the low of September 13 and resistance at 1.6209, the high of September 26.

Data showed that the U.K. manufacturing purchasing managers' index fell more-than-expected in September, declining to 48.4 from 49.5 the previous month.

Analysts had expected the index to tick down to 49.3 in September.

Separately, the Bank of England said that net lending to individuals fell by GBP0.4 billion in August, after a GBP0.6 billion rise the previous month, compared to expectations for an increase of GBP0.7 billion.

Sentiment remained under pressure after the Spanish government said on Friday that the effort to clean up an ailing banking system will widen its budget gap and increase its debt load.

The comments came after the Bank of Spain announced that the recapitalization needs of Spanish banks amounted to EUR59.3 billion, broadly in line with market expectations.

Markets were also eyeing the outcome of Moody's rating agency's latest review of Spain's sovereign rating, which may see it downgraded to junk status.

Meanwhile, data showing that manufacturing activity in China contracted for the second consecutive month in September, falling to the lowest level since November 2011, sparked fresh concerns over the outlookk for growth in the world's second largest economy.

The pound was also lower against the euro with EUR/GBP adding 0.29%, to hit 0.7979.

Later in the day, the U.S. was to publish a report by the Institute for Supply Management on manufacturing PMI, while Federal Reserve Chairman Ben Bernanke was due to speak at the Economic Club of Indiana, in Indianapolis.


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