Forexpros – The pound remained close to a two-day low against the U.S. dollar on Tuesday, as downbeat U.K. manufacturing data weighed on sterling amid sustained concerns over the handling of the debt crisis in the euro zone.
GBP/USD hit 1.6192 during European afternoon trade, the pair’s lowest since April 27; the pair subsequently consolidated at 1.6225, edging down 0.07%.
Cable was likely to find support at 1.6157, the low of April 26 and resistance at 1.6279, the high of April 27 and an eight-month high.
The Markit manufacturing purchasing managers’ index dropped to 50.5 in April from a downwardly revised 51.9 in March, but stayed above the neutral 50.0 mark that separates expansion from contraction.
Analysts had expected the manufacturing PMI to fall to 51.4 last month.
The report said new export orders fell at the fastest rate since May 2009, as a result of sluggish overseas demand.
Factory-gate price inflation reached a seven-month high, even though manufacturers’ costs rose at a much slower pace than in March.
The report underlined concerns over the outlook for the U.K. economy, after official data last week showed that the economy entered a recession in the first quarter, although the pound remained supported by diminished expectations for another round of easing by the Bank of England.
Meanwhile, sentiment on the dollar remained soft after U.S. data on Monday showed that manufacturing activity in the Chicago area slowed significantly more-than-expected in April, while a separate report showed that consumer spending slowed last month.
Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.
The pound was also lower against the euro, with EUR/GBP adding 0.27% to hit 0.8176.
Later in the day, the Institute for Supply Management was to release a closely watched report on U.S. manufacturing activity.
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