Forexpros – The pound dropped against the dollar Wednesday, erasing earlier gains as investors who sold greenbacks to invest in riskier but more attractive securities and currencies replenished their dollar supplies in early Asian trading.
GBP/USD hit 1.5643 Wednesday, down 0.04% and up from a session low of 1.5628 while off from a high of 1.5658.
The pair was likely to find support at 1.5507, Tuesday’s low, and resistance at 1.5670, Tuesday’s high.
Manufacturing data earlier put to rest some fears that the U.S. economy remained very sluggish.
The U.S. Institute of Supply Management’s manufacturing index rose to 53.9 in December from 52.7 in November, well above market expectations.
Stronger output data there as well as in China and elsewhere across the globe sparked a rally for stocks and commodities worldwide, and investors sold dollars earlier to get in on the action.
Meanwhile, the pound was mixed against the euro and the yen, with EUR/GBP falling 0.06% to hit 0.8335 and GBP/JPY falling 0.11% to hit 119.93.
U.S. unemployment figures will serve as a primary steering current for currency markets during the remainder of the week.
On Thursday, the U.S. will unveil initial jobless claims, while the ADP National Employment Report will shed some light on the pace of hiring in the private sector.
On Friday, the Bureau of Labor Statistics will unveil its December unemployment rates.
Later Wednesday, the U.K. government will report on lending demand, mortgage approvals and money supply.
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